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Subject : Contracts 1
Prepared by: B.V.S.Suneetha
Assistant Professor
Damodaram Sanjivayya
National Law University
Sabbavaram.
1. Balfour v Balfour [1919] 2 KB 571
2. Merritt v Merritt [1970] 1 WLR 1211
EWCA Civ 11 QB 256
3. Carlil v Carbolic Smoke Ball company
4. Galloway v Galloway (1914) 30 TLR 531
5. Harvey v Facie [1893] UKPC 1
6. Pharmaceutical society v Boots Cash Chemist Ltd 2 WLR 427
7. Lalman Shukla V Gauri Datt 1913 40 ALJ 489
8. Boulton v Jones (1857) 2 H and N 564
9. Ramsgate v Victoria Montefiore (1866) LR 1 Ex 109
10. Henderson v Stevenson (1843) 3 Hare 100
11. Parker v South eastern railway [1877] 2 CPD 416
12. Brogden v Metropolitan Railway Co (1877) 2 AppCas 666
13. Henthorn v Fraser [1892] 2 Ch 27
14. Felthouse v Bindley (1862) EWHC CP J 35
15. Powell v Lee (1908) 99 LT 284
16. Thornton v Shoe lane parking ltd. [1970] EWCA Civ 2
17. Entores v Far Miles East Company [1955] EWCA Civ 3
20. Bhagwandas Goverdhandas Kedia vs. Girdharilal [1965] Insc 171
Parshottamdas & Co. & Ors.
21. Tweedle v Atkinson [1861] EWHC J57 (QB)
22. Chinnaya v Ramayya ILR (1876-82) 4 Mad 137
23. Durgaprasad v Baldeo 1880 3 ALL 221
24. Kedarnath v Gorie Muhammad (1887) ILR 14 Cal 64
25. Shuppu Ammal v K. Subramaniam 4 Ind Cas 1083
26. Khwaja Mohammad Khan v Hussaini Begum (1907) ILR 29 All 222
27. Mohireebibi v Dharmodas Ghose (1903) 30 Cal. 539
28. Leslie v Shiell [1914] 3 KB 607
29. Chikkam Ammiraju v Chikkam Seshamma (1917) 41 Mad 33
30. Derry v Peek [1889] UKHL 1
31. Peek v Gurney [1873] LR 6 HL 377
32. With v O’Flanagan [1936] Ch 575
33. Shri Krishnan v Kurukshetra University AIR 1976 SC 376
34. Mannu singh v Umadatt (1890) 12 All 523
35. Cundy v Lindsay LR 3 App Cas 459
36. Griffith v Brymer 1903 19 T.L.R. 434.
37. Ingram v Little [1961] 1 QB 31
38. Bai Vijili v Nansa Nagur (1886) I.L.R. 10 B. 152
FACTS
JUDGMENT
[1892] EWCA CIV 1 filled with carbolic acid (or phenol). The
tube would be inserted into a user's nose
and squeezed at the bottom to release the
COURT MEMBERSHIP vapours. The nose would run, ostensibly
flushing out viral infections.
JUDGE(S) SITTING
The Company published advertisements in
LINDLEY LJ, BOWEN LJ AND AL
the Pall Mall Gazette and other
SMITH LJ
newspapers on November 13, 1891,
FACTS
claiming that it would pay £100
The Carbolic Smoke Ball Co. made a (equivalent to £11,000 in 2018) to anyone
product called the "smoke ball" and who got sick with influenza after using its
product according to the instructions Mrs. Louisa Elizabeth Carlill saw the
provided with it. advertisement, bought one of the balls and
used it three times daily for nearly two
£100 reward will be paid by the Carbolic
months until she contracted the flu on 17
Smoke Ball Company to any person who
January 1892. She claimed £100 from the
contracts the increasing epidemic influenza
Carbolic Smoke Ball Company. They
colds, or any disease caused by taking
ignored two letters from her husband, a
cold, after having used the ball three times
solicitor. On a third request for her reward,
daily for two weeks, according to the
they replied with an anonymous letter that
printed directions supplied with each ball.
if it is used properly the company had
£1000 is deposited with the Alliance Bank, complete confidence in the smoke ball's
Regent Street, showing our sincerity in the efficacy, but "to protect themselves against
matter. During the last epidemic of all fraudulent claims", they would need her
influenza many thousand carbolic smoke to come to their office to use the ball each
balls were sold as preventives against this day and be checked by the secretary. Mrs.
disease, and in no ascertained case was the Carlill brought a claim to court. The
disease contra barristers representing her argued that the
advertisement and her reliance on it was a
contract between the company and her, so
the company ought to pay. The company
argued it was not a serious contract.
JUDGMENT
cted by those using the carbolic smoke The Carbolic Smoke Ball Company,
ball. represented by H. H. Asquith, lost its
argument at the Queen's Bench. It
One carbolic smoke ball will last a family
appealed straight away. The Court of
several months, making it the cheapest
Appeal unanimously rejected the
remedy in the world at the price, 10s. post
company's arguments and held that there
free. The ball can be refilled at a cost of 5s.
was a fully binding contract for £100 with
Address: “Carbolic Smoke Ball
Mrs. Carlill. Among the reasons given by
Company”, 27, Princes Street, Hanover
the three judges were
Square, London.
(1) that the advertisement was not a policy. You have only to look at the
unilateral offer to all the world but an offer advertisement to dismiss that suggestion.
restricted to those who acted upon the
Then it was said that it is a bet. Hawkins,
terms contained in the advertisement
J., came to the conclusion that nobody ever
(2) that satisfying conditions for using the dreamt of a bet, and that the transaction
smoke ball constituted acceptance of the had nothing whatever in common with a
offer bet. I so entirely agree with him that I pass
over this contention also as not worth
(3) that purchasing or merely using the
serious attention.
smoke ball constituted good consideration,
because it was a distinct detriment incurred Then, what is left? The first observation I
at the behest of the company and, will make is that we are not dealing with
furthermore, more people buying smoke any inference of fact. We are dealing with
balls by relying on the advertisement was a an express promise to pay £100. in certain
clear benefit to Carbolic events. Read the advertisement how you
will, and twist it about as you will, here is
(4)that the company's claim that £1000
a distinct promise expressed in language
was deposited at the Alliance Bank
which is perfectly unmistakable —
showed the serious intention to be legally
bound. The judgments of the court were as “£100. reward will be paid by the Carbolic
follows. Smoke Ball Company to any person who
contracts the influenza after having used
the ball three times daily for two weeks
Lord Justice Lindley according to the printed directions
Lindley LJ gave the first judgment on it, supplied with each ball.”
after running through the facts again. He He follows on with essentially five points.
makes short shrift of the insurance and First, the advertisement was not "mere
wagering contract arguments that were puff" as had been alleged by the company,
dealt with in the Queen's Bench. because the deposit of £1000 in the bank
which were raised in the Court below. I advertisement was an offer made
refer to them simply for the purpose of specifically to anyone who performed the
dismissing them. First, it is said no action conditions in the advertisement rather than
will lie upon this contract because it is a a statement "not made with anybody in
particular." Third, communication of world, the contract was not with the whole
acceptance is not necessary for a contract world. Therefore, it was not an absurd
when people's conduct manifests an basis for a contract, because only the
intention to contract. Fourth, that the people who used it would bind the
vagueness of the advertisement's terms company. Fourth, he says that
was no insurmountable obstacle. And fifth, communication is not necessary to accept
the nature of Mrs. Carlill's consideration the terms of an offer; conduct is and
(what she gave in return for the offer) was should be sufficient. Fifth, good
good, because there is both an advantage consideration was clearly given by Mrs.
in additional sales in reaction to the Carlill because she went to the
advertisement and a "distinct "inconvenience" of using it, and the
inconvenience" that people go to when company got the benefit of extra sales.
using a smoke ball.
The plaintiff instituted this action against plaintiff complied with the defendant's
the defendant for alimony pendente lite, request.
permanent alimony and attorney's fees by The plaintiff's evidence further tended to
the filing of a complaint on 21 November show that she then moved to her parents'
1977. During the hearing before the trial motel in Wilson. She helped with the work
court on these matters, the plaintiff at the motel when she was needed but was
presented evidence tending to show that not paid a regular salary and did not want a
she and the defendant were married to regular salary. In addition to room and
each other on 17 August 1973. During the board, however, the plaintiff's mother
latter part of 1975, the parties separated occasionally gave her money for car
and lived apart for approximately one year. payments when she needed such money
They reunited in December of 1976 and and gave her "some spending money." The
moved their residence to Raleigh. Prior to plaintiff testified that she did not have any
regular source of income and that the approximately $8,400 per year. Based
defendant had not provided any support for upon its findings, the trial court concluded
her since their separation. In addition, that the defendant abandoned the plaintiff
evidence was introduced tending to show on 27 October 1977. The Court also
that the defendant had a gross income of concluded that the plaintiff was not
less than $13,200 per year and a net substantially dependent upon the defendant
income of approximately $8,400 per year. for her maintenance and support or in
substantial need of maintenance and
The defendant introduced evidence tending
support and was not, therefore, a
to show that he objected to the plaintiff
dependent spouse within the intent and
working at the motel during their marriage
meaning of the General Statutes of North
and asked her to quit working there. He
Carolina. From the entry of judgment
testified that she often failed to return from
reflecting these findings and conclusions
the motel until 6:00 p.m. or 7:00 p.m. and
by the trial court, the plaintiff appealed.
would at times return as late as 9:00 p.m.
In addition, he testified that she spent the MITCHELL, Judge.
night at the motel from three to five times
Only a dependent spouse is entitled to
a month during this period.
alimony or alimony pendente lite. G.S. 50-
At the conclusion of the hearing on these 16.2 and 16.3. A dependent spouse is by
matters, the trial court found among other definition married to a supporting spouse
things that the defendant had ordered the since a dependent spouse always has a
plaintiff out of their home on 27 October spouse "upon whom [he or she] is actually
1977 and had provided no support for the substantially dependent or from whom [he
plaintiff since that time. The trial court or she] is substantially in need of
also found that the plaintiff was gainfully maintenance and support." Conversely, a
employed prior to the marriage and living supporting spouse is by definition married
in her own apartment and was, at the time to a dependent spouse. Therefore, a
of the hearing, "able-bodied, intelligent determination that one spouse is a
and capable to find employment." The trial supporting spouse is a determination that
court further found that the plaintiff had, at the other is a dependent spouse and vice
the time of the hearing, no salary other versa.
than room, board and spending money as
A dependent spouse is "a spouse, whether
provided by her parents and that the
husband or wife, who is actually
defendant had a net income of
substantially dependent upon the other portion of the statute be challenged on
spouse for his or her maintenance and constitutional grounds.
support or is substantially in need of
The presumption that the husband is the
maintenance and support from the other
supporting spouse, and thus by definition
spouse." A wife is actually substantially
that the wife is the dependent spouse,
dependent upon her husband for her
controls until evidence has been presented
maintenance and support or in substantial
tending to show that the wife is not in fact
need of support by him if she is incapable
a dependent spouse. The husband has not
of adequately providing for herself or is
borne his burden in such cases until he has
capable of adequately providing for herself
offered evidence tending to show that his
but does not have a reasonable opportunity
wife is neither substantially dependent
to do so.
upon him for her maintenance and support
Once it is established, however, that the nor substantially in need of maintenance
defendant is the plaintiff's husband and and support by him. G.S. 50-16.1(3). Such
that he is capable of supporting her, the evidence may be presented in the form of
defendant is presumed to be the supporting evidence tending to show that the wife is
spouse provides in part that, "A husband is in fact adequately supporting herself or is
deemed to be the supporting spouse unless capable of adequately supporting herself
he is incapable of supporting his wife." and has a reasonable opportunity to do so
This sentence of the statute establishes a but has not sought to support herself. Cf.
presumption that a male spouse is the Conrad v. Conrad, 252 N.C. 412, 113
supporting spouse and, conversely, that the S.E.2d 912 (1960) (capacity of supporting
female is the dependent spouse. The husband to earn rather than actual earnings
defendant did not seek during the hearing considered in determining amount of
before the trial court, nor has he sought alimony); Robinson v. Robinson, 10 N.C.
before this Court, to challenge this App. 463, 179 S.E.2d 144 (1971) (same).
presumption on the ground that it
The trial court in the present case found
constitutes unconstitutionally gender based
that the plaintiff wife had been gainfully
discrimination. Therefore, we are not
employed prior to her marriage to the
required to express an opinion here with
defendant and was "able-bodied,
regard to the very substantial constitutional
intelligent and capable to find
questions which would arise should this
employment." This finding was not
sufficient, however, to support the trial
court's conclusion that the plaintiff was not value of attorney's fees sought by the
a dependent spouse within the meaning of plaintiff. For the reasons previously stated,
G.S. 50-16.1(3), as it did not include a the order of the trial court from which the
finding that the plaintiff had a reasonable plaintiff has appealed will be vacated and
opportunity to but did not adequately the cause remanded to the trial court for a
support herself. new hearing with regard to the plaintiff's
application for alimony pendente lite and
Additionally, the evidence presented
counsel fees and for such other actions as
would not have supported such a finding.
accord with applicable law and the present
Evidence of a reasonable opportunity by
status of the parties.
the wife to adequately support herself
might have been shown by introducing
evidence, if any existed, that the plaintiff
did not make reasonable efforts to obtain
employment for which she was suited and INVITATION TO OFFER
which was available, that she had refused
employment opportunities that were
HARVEY V FACIE
available to her, or that she had been
employed in a manner which would have 1893 UKPC 1
adequately supported her but terminated
RULING COURT:
such employment in order to establish her
status as a dependent spouse. As the JUDICIAL COMMITTEE OF THE
defendant failed to offer sufficient PRIVY Council
evidence to overcome the presumption that FACTS
the plaintiff was a dependent spouse, the
Letters were written back and forth
trial court erred in concluding in the order
appealed from that the plaintiff was not a Harvey – Will you sell us bumper hall
dependent spouse. pen? Telegraph lowest price -answer paid.
We additionally note that the order Facey – Lowest price for bumper hall is
appealed from was entered more than one $900.
year ago and that some change in the
Harvey – We agree to buy bumper hall for
conditions of the parties is likely. Further,
the sum of $900 asked by you.
the record on appeal does not reflect any
evidence with regard to the reasonable
Harvey sued for specific performance of Harvey treated his response as an
this agreement and for an injunction to unconditional off to sell them the price
restrain the town of Kingston from taking named. Only binding aspect is the lowest
conveyance of the property (Facey was price in regard to a contract being formed.
previously engaged in negotiations to sell Agreement could have ONLY been legit if
the land to Kingston) Facey responded to the third telegram from
Harvey.
PROCEDURAL HISTORY
The case involved negotiations over a
Trial court dismissed the action on the
property in Jamaica. The defendant, Mr
ground that the agreement did not disclose
LM Facey, had been carrying on
a concluded contract. Appealed by
negotiations with the Mayor and Council
plaintiffs, Supreme court of Jamaica
of Kingston to sell a piece of property to
reversed the decision. Defendant’s
Kingston City. On 7 October 1893, Facey
appealed to the judicial committee of privy
was traveling on a train between Kingston
council
and Porus and the appellant, Harvey, who
ISSUE wanted the property to be sold to him
Was there an explicit offer from Facey to rather than to the City, sent Facey a
sell the land for $900 to Harvey? telegram. It said, "Will you sell us Bumper
Hall Pen? Telegraph lowest cash price-
HOLDING
answer paid". Facey replied on the same
No, there was not. day: "Lowest price for Bumper Hall Pen
£900." Harvey then replied in the
RULE
following words. "We agree to buy
An offer CAN NOT be implied by writing.
Bumper Hall Pen for the sum of nine
It can only be concrete and sound…The
hundred pounds asked by you. Please send
appellants can’t imply that Facey made an
us your title deed in order that we may get
offer when he, as a matter of fact, did not
early possession."
make an offer.
Facey, however refused to sell at that
REASONING
price, at which Harvey sued. Harvey had
(from Harvey) 1st question was his action dismissed at trial but won his
willingness to sell, 2nd question asks the claim on the Court of Appeal, which
lowest price. Facey only replied to the reversed the trial court decision, declaring
second question in regard to the price. that a binding agreement had been proved.
The appellants obtained leave from the FACTS
Supreme Court of Judicature of Jamaica to
Boots Cash Chemists had just instituted a
appeal to the Queen in Council (i.e. the
new way for its customers to buy certain
Privy Council). The Privy Council
medicines. Shoppers could now pick drugs
reversed the Supreme Court's opinion,
off the shelves in the chemist and then pay
reinstating the appeals court's decision and
for them at the till. Before then, all
stating the reason for its action.
medicines were stored behind a counter
The Privy Council advised that no contract meaning a shop employee would get what
existed between the two parties. The first was requested. The Pharmaceutical
telegram was simply a request for Society of Great Britain objected and
information, so at no stage did the argued that under the Pharmacy and
defendant make a definite offer that could Poisons Act 1933, that was an unlawful
be accepted. Lord Morris LC gave the practice. Under s 18(1), a pharmacist
following judgment needed to supervise at the point where "the
sale is effected" when the product was one
DISPOSITION
listed on the 1933 Act's schedule of
Reversed, judgment to the trial court in poisons. The Society argued that displays
favour of Harvey is restored. of goods were an "offer" and when a
shopper selected and put the drugs into
their shopping basket, that was an
"acceptance", the point when the "sale is
effected"; as no pharmacist had supervised
the transaction at this point, Boots was in
PHARMACEUTICAL SOCIETY OF
breach of the Act. Boots argued that the
GB
sale was effected only at the tills.
V
JUDGMENT
BOOTS CASH CHEMIST
Both the Queen's Bench Division of the
[1953] 1 All ER 482, [1953] 2 WLR 427
High Court and the Court of Appeal sided
with Boots. They held that the display of
goods was not an offer. Rather, by placing
BENCH
the goods into the basket, it was the
SOMERVELL LJ, BIRKETT LJ AND customer that made the offer to buy the
ROMER LJ
goods. This offer could be either accepted indicated the articles which he needs, the
or rejected by the pharmacist at the cash shop-keeper or someone on his behalf
desk. The moment of the completion of accepts that offer. Then the contract is
contract was at the cash desk, in the completed. I can see no reason at all, that
presence of the supervising pharmacist. being I think clearly the normal position,
Therefore, there was no violation of the for drawing any different implication as a
Act. result of this layout. The Lord Chief
Justice, I think, expressed one of the most
Somervell LJ said,
formidable difficulties in the way of the
“Whether that is a right view depends on suggestion when he pointed out that, if the
what are the legal implications of this Plaintiffs are right, once an article has
layout, the invitation to the customer. Is it been placed in the receptacle the customer
to be regarded as an offer which is himself is bound and he would have no
completed and both sides bound when the right without paying for the first article to
article is put into the receptacle, or is it to substitute an article which he saw later of
be regarded as a more organised way of the same kind and which he perhaps
doing what is done already in many types preferred. I can see no reason for implying
of shops — and a bookseller is perhaps the from this arrangement which the
best example - namely, enabling customers Defendants have referred to any
to have free access to what is in the shop implication other than that which the Lord
to look at the different articles and then, Chief Justice found in it, namely, that it is
ultimately, having got the ones which they a convenient method of enabling
wish to buy, coming up to the assistant customers to see what there is and choose
and saying "I want this"? The assistant in and possibly put back and substitute
999 times out of 1,000 says "That is all articles which they wish to have and then
right", and the money passes and the go up to the cashier and offers to buy what
transaction is completed. I agree entirely they have so far chosen. On that
with what the Lord Chief Justice says and conclusion the case fails, because it is
the reasons he gives for his conclusion admitted that then there was supervision
that in the case of the ordinary shop, in the sense required by the Act and at the
although goods are displayed and it is appropriate moment of time. For these
intended that customers should go and reasons, in my opinion, the appeal should
choose what they want, the contract is not be dismissed. ”
completed until, the customer having
Birkett LJ followed on by saying, person who might come in and that he can
insist by saying 'I accept your offer'".
“The short point of the matter was, at what
point of time did the sale in this particular Then he goes on to deal with the
shop at Edgware take place? My Lord has illustration of the bookshop and continues:
explained the system which has been
"Therefore, in my opinion, the mere fact
introduced into that shop (and possibly
that a customer picks up a bottle of
other shops since) in March 1951. The two
medicine from the shelves in this case does
ladies in this case, Miss Mainwaring and
not amount to an acceptance of an offer to
Miss Marrable, who went into that shop,
sell. It is an offer by the customer to buy. I
each took a particular package containing
daresay this case is one of great
poison from the particular shelf, put it into
importance, it is quite a proper case for
their basket, came to the exit and there
the Pharmaceutical Society to bring, but I
paid. It is said upon the one hand that
think I am bound to say in this case the
when the customer takes the package from
sale was made under the supervision of a
the poison section and puts it into her
pharmacist. By using the words 'The sale
basket the sale there and then takes place,
is effected by, or under the supervision of,
On the other hand, it is said the sale does
a registered pharmacist', it seems to me
not take place until that customer who has
the sale might be effected by somebody not
placed that package in the basket comes to
a pharmacist. If it be under the
the exit.
supervision of a pharmacist, the
The Lord Chief Justice dealt with the pharmacist can say 'You cannot have that.
matter in this way, and I would like to That contains poison'. In this case I
adopt these words: decide, first that there is no sale effected
merely by the purchaser taking up the
"It seems to me therefore, applying
article. There is no sale until the buyer's
common sense to this class of transaction,
offer to buy is accepted by the acceptance
there is no difference merely because a
of the money, and that takes place under
self-service is advertised. It is no different
the supervision of a pharmacist. And in
really from the normal transaction in a
any case, I think, even if I am wrong in the
shop. I am quite satisfied it would be
view I have taken of when the offer is
wrong to say the shopkeeper is making an
accepted, the sale is by or under the
offer to sell every article in the shop to any
supervision of a pharmacist".
I agree with that and I agree that this BANNERJI J.
appeal ought to be dismissed.
BACKGROUND
the person who traces the missing child there must be an acceptance to offer in
and defendant was totally ignorant of this order to convert it into a contract and
specific performance of his promise. of tracing the missing child he was acting
as a servant and thus fulfilling the
CONTENTIONS OF BOTH THE
responsibilities and obligations for which
PARTIES
he was sent to Hardwar from Cawnpore.
PETITIONERS
JUDGMENT
The petitioners strongly contended that
It was held by the Honorable Court that
performance of an act is sufficient for
knowledge and assent about a proposal is
providing rewards attached with such
must in order to convert a proposal into
performance. They stated that it is
enforceable agreement and in the present
immaterial that whether person performing
case plaintiff was neither aware nor has
the act has knowledge of rewards
assent about the particular act. It was also
associated with it or not. He also argued
said by the Honorable Judge that plaintiff BENCH
was merely fulfilling his obligations at the
POLLOCK CB
time when he was tracing the boy.
BRAMWELL B
So, the appeal was dismissed and it was
held that plaintiff was not entitled to claim
reward for finding the missing boy. In this FACTS
case it was highlighted by the Honorable
This case is based on the offer made to a
High Court of Allahabad that knowledge
particular person. In Contract Law, an
and acceptance of a proposal are the basic
offer is a promise in exchange for
essentials in order to constitute a valid
performance by other party. An offer can
contract. If the person gives his assent and
be revoked or terminated under certain
then performs the condition of proposal
conditions.
than only he is entitled to claim rewards
associated with such proposal. KINDS OF OFFER
FACTS
BOULTON
The defendant i.e. Jones sent a written
V order for goods to a shop which is owned
by Brocklehurst and which was addressed
JONES
to him by name. Unknown to the
{1857} 2H AND N564 defendant, Brocklehurst had earlier that
day sold and transferred his business to
Boulton.But Boulton fulfilled the order securing to himself all the benefit of the
and delivered the goods to the defendant contract.
without notifying him that he had taken
“MARTIN B” said that where the facts
over the business. The defendant accepted
prove that the defendant never meant to
the goods and consumed them in the belief
contract with A alone, B can never force a
that they had been supplied by
contract upon him, he was dealt with A,
Brocklehurst. When he received Boulton’s
and a contract with no one else can be set
invoice he refused to pay it claimimg that
up against him.
he had intended to deal with Brocklehurst
personally, since he had dealt with them “BRAMWELL B” said that I do not lay it
previously and had a set-off on which he down because a contract was made in one
The court held that the defendant i.e. Jones about rescissions of a voidable contract.
The point raised is, whether the facts like, or where there might be a set-off, no
proved did no shew an intention on the other person can interpose and adopt the
part of the defendants to deal with contract. As to the difficulty that the
Brocklehurst. The plaintiff, who succeeded defendants need not pay anybody, I do not
Brocklehurst in business, executed the see why they should, unless they have
order without any intimation of the change made a contract either express or implied. I
that had taken place, and brought this decide the case on the ground that the
action to recover the price of the goods defendants did not know that the plaintiff
supplied. It is a rule of law, that if a person was the person who supplied the goods,
intends to contract with A, B. cannot give and that allowing the plaintiff to treat the
himself any right under it. Here the order contract as made with him would be a
acceptance took place in November and communicated, remains open until it lapses
shares had been allotted to him and that the circumstances, there is no obligation for
balance of the purchase price should be the proposer to keep his proposal open
shares was less and the defendant refused He may revoke it at any time before
to accept the shares and the court held the acceptance. Furthermore, one of the
refusal justified because such a proposal conditions that automatically revoke the
should have been accepted within a proposal is the lapse of time either
reasonable time. The period between June specified or reasonable time limits. As in
and November was clearly not reasonable. the above case the court accepted and
judged against the plaintiff because no
specific time was prescribed by the
Issues: The issues in the above case deal
company and they did not communicated
with: Revocation of offer by lapse of time
their acceptance within a reasonable time
and provides for two situations:
limit.
Lapse of time occurring upon the
The offer lapsed after the reasonable time
expiration of the time prescribed in the
not because this must be implied in the
proposal for its acceptance. Therefore, the
offer but because failure to accept the offer
issue in the case was that there was no
within a reasonable time.
Moreover, the proposer at the beginning party. And in the case, two possible
when he was submitting his application situations could be seen;
forms to be allotted shares did not allow
1. Where an offer is stated to be open
such a long period of time and as a result
for a specific length of time in
he was winner of the case and the court
which the time would be prescribed
accepted his refusal to pay the share price
either by the proposer or by the
when the acceptance was communicated to
acceptor. So, when the acceptance
him. Lesson learned: Firstly, from the
is not given or communicated
above case I have learned that an offer can
during the specified time the
be made from any party in the contract.
proposal is revoked.
It is not necessarily or compulsory that the
2. Where an offer is stated to be open
offer should come from the party who ones
for a reasonable length of time in
the object consideration. As, in the above
which the chance for acceptance
case the offer comes from the buyer of the
open utile the lapse of the
shares which are owned and to be allotted
reasonable time. The reasonable
by the company. Secondly, I have learned
time is based on the nature and the
about the revocation of an offer in which
custom of the business which
the proposer can claim that the offer is
determines for how long the door
revoked. Based on this case the revocation
for the acceptance is open or what
was made based on the lapse of a
is the range of time that is
reasonable time which is accepted by both
acceptable for giving the
parties.
acceptance after the proposal is
Although the plaintiff which sued the communicated.
defendant in the court but because of the
lapse of a reasonable time the court judge
against the plaintiff because they didn’t
have an specific time prescribed for the
acceptance and also the reasonable time
was lapsed. To conclude my learning from
the case: The communication of proposal
can be from any party who wants to
conclude the contract with the second
agent filed the documents and did nothing
more. For a while, both acted according to
ACCEPTANCE
the agreement document's terms. But then
some more serious disagreements arose,
and Brogden argued that there had been no
formal contract actually established.
BROGDEN
V
JUDGMENT
METROPOLITAN RAILWAY
The House of Lords (The Lord Chancellor,
COMPANY
Lord Cairns, Lord Hatherley, Lord
(1876–77) L.R. 2 APP. CAS. 666
Selborne, Lord Blackburn, and Lord
Gordon) held that a contract had arisen by
conduct and Brogden had been in clear
COURT
breach, so he must be liable. The word
JUDICIAL COMMITTEE OF THE "approved" on the document with
HOUSE OF LORDS Brogden's name was binding on all the
JUDGEMENT
Keating J
have to consider is whether the horse was 257 S.W. 308 (TEX. CIV. APP. 1923),
the property of the plaintiff at the time of
99 LT 284
the sale on the 25th of February. It seems
to me that nothing had been done at that
time to pass the property out of the nephew
BENCH
and vest it in the plaintiff. A proposal had
KING’S BENCH DIVISION
been made, but there had before that day
been no acceptance binding the nephew. Section 2(b) of Contract Act 1872- When
the person to whom the proposal is made
Willes J.
signifies his assent thereto, the proposal is
Coats v. Chaplin is an authority to shew
said to be accepted. A proposal, when
that John Felthouse might have had a
accepted, becomes a promise
remedy against the auctioneer. There, the
3. Communication, acceptance and 1916, and $3 per month for the remainder,
revocation of proposals.—The with privilege of paying $9 each three
communication of proposals, the months. Appellee defended on three
acceptance of proposals, and the grounds, as follows: First, that the order
revocation of proposals and acceptances, was procured through fraud; second,
respectively, are deemed to be made by failure of consideration; and, third, the
any act or omission of the party statutes of limitation. Appellant, by
proposing, accepting or revoking, by supplemental petition, pleaded waiver by
which he intends to communicate such appellee on any question of fraud or failure
proposal, acceptance or revocation, or of consideration, and that appellee had
which has the effect of communicating it. tolled the statute of limitation by a
—The communication of proposals, the renewed written promise to pay in a letter
acceptance of proposals, and the to appellant, dated May 30, 1917, all of
revocation of proposals and acceptances, which supplemental pleadings were
respectively, are deemed to be made by properly excepted to and denied by
any act or omission of the party appellee. The case was tried before the
proposing, accepting or revoking, by justice of the peace and judgment rendered
which he intends to communicate such for defendant. On appeal to the county
proposal, acceptance or revocation, or court, it was tried before a special judge,
which has the effect of communicating it." the appellee being the regular county
judge, and Judgment again rendered for
defendant. From this judgment plaintiff
FACTS appeals.
We think appellee's testimony clearly letter above quoted from, and that such
establishes his pleas of fraud and limitation offer was made only as a compromise.
unless same were defeated by his letter to This is not denied nor contradicted by
appellant, dated May 30, 1917. This letter appellant. The undisputed testimony shows
as shown in the record, and omitting the that appellant did not ship any more books
parts not pertinent to our inquiry, to appellee, that it kept the $10 sent, and
contained the following language: that it sent the local expressman for the
books to be reshipped to it. He declined to
"I want to make you the proposition to pay
receive same from appellee because not
you $25.00 and reship you the books, and I
properly boxed, but we think this
will pay freight on same. The books are in
immaterial. We think that there was
as good condition as when I opened them,
sufficient evidence to authorize the trial
for the reason that they are not suited to
court in finding that appellant accepted
my practice and therefore have not been
appellee's offer of compromise and that it
used.
could not, therefore, sue upon the original
"I am inclosing you my check for $10.00. contract. This would sustain a judgment
If you will accept my proposition I will against appellant.
immediately send you the other $15.00. If
If the trial court did in fact find that the
you do not accept this, then I will pay you
order sued upon was supplanted by a
for the books as I can. At any rate do not
compromise between the parties on May
ship me any more of the books, I cannot
30, 1917, inasmuch the suit was not filed
use them."
until April 25, 1922, nearly five years
later, we think he could also have found
for the appellee on his plea of limitation trial court, under the evidence, could have
even as applied to the new agreement, found against the appellant. It is not the
which would also support his judgment. province of this court to pass upon the
weight of testimony. There being evidence
Appellant contends, however, that
to support the judgment of the trial court,
appellee's letter was not a compromise
in the absence of his findings of fact and
offer, but a renewed promise to pay for the
conclusions of law, this court must affirm
books, in the following language of his
the judgment below.
letter: "If you do not accept this, then I will
pay for the books as I can" — and urges Affirmed.
that this defeats his plea of limitation. In
order for a new promise to pay to toll the
statutes of limitation it must contain an
unqualified admission of a just subsisting
indebtedness and express a willingness to
pay it. Krueger v. Krueger, 76 Tex. 178,
12 S.W. 1004, 7 L.R.A. 72. In the instant
case, neither the amount of the debt nor
that it is just appears to have been admitted
by appellee in said letter, and his promise
to pay is expressly contingent upon his
ability to pay. Being, to that extent at least,
a conditional promise to pay, the burden
was cast upon the plaintiff, if it depended
upon such new promise, to prove that
appellee was in fact able to pay within
STANDARD FORM OF CONTRACT
such time as would stop the running of the
statute of limitation against it. Lange v.
Caruthers, 70 Tex. 718, 8 S.W. 604. A
HENDERSON
finding of the trial court against the
appellant on this issue would likewise V
support a judgment against it.
STEVENSON
We have taken occasion in this opinion to
[1873] SLR 1198
set out some of the issues on which the
Plaintiff could not be said to have accepted
the a term which he has not seen, of which
FACTS
he knew nothing and which is not in any
Plaintiff bought a steamer ticket. Which way ostensibly connected with that which
contained on the face, words “Dublin to is printed and written upon the face of the
White heaven” on the back, certain terms, contract presented to him. The result
one of which excluded liability of the Co. would have been otherwise, if words like
for loss, injury or delay to the passenger or “for conditions see back” had been printed
his luggage. Plaintiff had not seen back of on face of the ticket to draw the
the ticket not there was any indication on passengers’ attention to the place where
the face about the conditions on the back. the conditions were printed.
Plaintiff’s luggage was lost by the ship
PRINCIPLE
wreck caused by the fault of Co’s servants.
“Where a written document is presented to
ISSUES
a party for acceptance, a reasonably
Can the plaintiff recover from the sufficient notice shall be given of the
company? presence of terms and conditions. Notice
to read the clause as he thought the ticket The majority of the Court of Appeal held
was only a receipt of payment. However, there should be a retrial. They said that if
he admitted that he knew the ticket Mr Parker knew of the conditions he
contained writing. Mr. Parker's bag, which would be bound. If he did not know, he
was worth more than £10, was lost. He would still be bound if he was given the
sued the company. The question of law put ticket in such a way as amounted to
to the court was whether the clause applied "reasonable notice". Mellish LJ said the
to Mr. Parker. At trial the jury found for following.
Mr. Parker as it was reasonable for him not
I am of opinion, therefore, that the proper
to read the ticket.
direction to leave to the jury in these cases
JUDGMENT is, that if the person receiving the ticket
Divisional Court did not see or know that there was any
writing on the ticket, he is not bound by
Lord Coleridge CJ, Brett J and Lindley J
the conditions; that if he knew there was
decided in favour of Mr. Parker, upholding
writing, and knew or believed that the
the jury award. Lindley J remarked,
writing contained conditions, then he is
On the finding of the jury, I think we bound by the conditions; that if he knew
cannot say that the defendants did not there was writing on the ticket, but did not
know or believe that the writing contained COURT MEMBERSHIP
conditions, nevertheless he would be
JUDGE(S) SITTING
bound, if the delivering of the ticket to him
in such a manner that he could see there LORD DENNING MR, MEGAW LJ
was writing upon it, was, in the opinion of AND SIR GORDON WILMER
But, although reasonable notice of it was I do not think the garage company can
not given, Mr. Machin said that this case escape liability by reason of the exemption
came within the second question condition. I would, therefore, dismiss the
propounded by Mellish L.J., namely that appeal.”
Mr. Thornton "knew or believed that the
Megaw LJ and Sir Gordon Wilmer agreed
writing contained conditions." There was
with the onerous point but reserved their
no finding to that effect. The burden was
opinions on where the contract was
on the company to prove it, and they did
concluded. Furthermore, Sir Gordon
not do so. Certainly, there was no evidence
Wilmer distinguished this from the other
that Mr. Thornton knew of this exempting
ticket cases based upon the fact that a
condition. He is not, therefore, bound by it.
human clerk proffered the ticket and the
Mr. Machin relied on a case in this court buyer had the opportunity to say I do not
last year - Mendelssohn v Normand Ltd. like those conditions.
[1970] 1 QB 177. Mr. Mendelssohn
The car park at Shoe Lane was demolished
parked his car in the Cumberland Garage
in early 2014
at Marble Arch, and was given a ticket
which contained an exempting condition.
There was no discussion as to whether the
condition formed part of the contract. It
was conceded that it did. That is shown by
the report in the Law Reports at p. 180.
Yet the garage company were not entitled
to rely on the exempting condition for the
reasons there given.
ENTORES LTD
That case does not touch the present,
where the whole question is whether the V
exempting condition formed part of the
MILES FAR EAST CORP
[1955] EWCA CIV 3, telex: if a phoneline "went dead" just
before the offeree said "yes", it would be
[1955] 2 QB 327
absurd to assume that the contract was
formed and the parties would not have to
received. The offeror in such plaintiffs put the case in another way. They
circumstances is clearly bound, because he say that the contract by Telex was varied
will be estopped from saying that he did by letter posted in Holland and accepted
not receive the message of acceptance. It is by conduct in England: and that this
his own fault that he did not get it. But if amounted to a new contract made in
there should be a case where the offeror England. The Dutch company on
without any fault on his part does not September 11, 1954, wrote a letter to the
receive the message of acceptance - yet the English company saying: "We confirm
sender of it reasonably believes it has got having sold to you for account of our
home when it has not - then I think there is associates in Tokyo: 100 metric tons
FACTS
was accepted at Ahmedabad and the The making of an offer is a part of cause of
appellant was to be paid for the goods action in a suit for damages for breach of
through a bank in Ahmedabad. The contract. Hence, the court in whose
appellant contended that the respondents’ territorial jurisdiction such offer was made
offer to purchase was accepted at can try such suit.
Khamgaon; the delivery and payment of
The contract is formed where the
the goods were also agreed to be made in
acceptance of offer is intimated to the
Khamgaon and the City Civil Court of
offerree. Hence, the court in whose
Ahmedabad did not have jurisdiction to try
territorial jurisdiction such acceptance of
the suit. The City Civil Court of
offer was intimated can try such suit.
Ahmedabad held that it had jurisdiction as
the acceptance of the offer was intimated JUDGMENT
to the offerree at Ahmedabad and that is
A contract comes into existence when an
where the contract was made. The
offer is accepted and the acceptance of the
appellants filed a revision application in
offer is intimated through anexternal
the High Court of Gujarat which was
manifestation by speech, writing or other
rejected. Then, the appellants preferred an
act recognised by law. However, an
appeal to the Supreme Court with special
exception to this rule has been made in the
leave.
interest of commercial expediency. When
ARGUMENTS a contract is negotiated through post, the
communication of acceptance is deemed to
CONTENTIONS OF APPELLANT
be complete when the acceptance of offer
is put into a course of transmission to the telephone. Hence, the Hon’ble Court held
offerer. The same rule is applicable in case that the trial Court was right in taking that
of a contract by telegram. Mere making of a part of the cause of action arose within
an offer does not form part of the cause of the jurisdiction of the Civil City Court.
action for damages for breach of contract Ahmedabad, where acceptance was
which has resulted from acceptance of the communicated by telephone to the
offer (Baroda Oil Cakes Traders v. respondents. The appeal was dismissed
Purshottam Narayandas Bagulia and Anr. with costs.
AIR1954Bom491).Though sections 3 and
DISSENTING OPINION BY JUSTICE
4 of the Contract Act speak about the
HIDAYATULLAH
communication, acceptance and revocation
of a proposal and acceptance respectively, Though the Contract Act is applicable in
the Act does not expressly deal with the India, it was drafted in England and
place where a contract is made and in English common law permeates it.In
determining the same, the interpretation Entores Ltd. v. Mills Far East Corporation,
clauses in section 2 of the Act must be it was held that a contract made by
not applicable to contracts made through accepted over the telephone, the place
where the acceptance takes place In this case, the court decided the question
constitutes the place where the contract is of the place of origin of the cause of action
made. Acceptance over the telephone is of in a suit for breach of contract made over
the same effect as if the person accepting it telephone. Here, the court also clarified the
had done so by posting a letter, or by rules regarding the communication,
sending off a telegram from that place”. In acceptance and revocation of proposal and
an old English case Newcomb v. De Roos acceptance with respect to a contract made
[(1859) 2 E & E 271], Hill J. observed: over the telephone. The decision further
“Suppose the two parties stood on different clarified that the rule of communication
sides of the boundary line of the district: and acceptance of offer applicable to
and that the order was then verbally given contracts made through post would not be
and accepted. The contract would be made applicable to contracts made over the
in the district in which the order was telephone.
accepted.”
CASE COMMENT
CONSIDERATION ultimately for the benefit of him and his
wife.
FACTS
ISSUE
Whether the plaintiff can bring an action that in a valid contract the consideration
against the defendant for the amount need not flow from the promisee only. It
promised in a contract where the could flow from any other person who is
consideration for such promise has been not a party to such contract. The Hon’ble
furnished by the mother of the defendant Court in this case, upheld this point of law
(plaintiff’s sister)? in the plaintiff’s right to recover the
annuity due to her from the defendant
ARGUMENTS ADVANCED
under the contract in question but their
CONTENTIONS BY THE PLAINTIFF reasons for the same were different.
The consideration for the defendant’s Innes J drew similarities between the
mother to gift the property to the defendant instant case and the English case Dutton v.
was defendant’s promise to pay an annuity Poole [(1677) 2 Levinz 210]. In Dutton v.
to the plaintiff. Hence, the plaintiff is Poole, a man had a daughter of
entitled to sue the defendant to recover the marriageable age and wanted to sell a
same. portion of wood that he possessed at the
EQUIVALENT CITATIONS
JUDGEMENT
(1887) ILR 14 CAL 64
The agreement was void being without
consideration as it had not moved at the
IN CALCUTTA HIGH COURT
desire of A. Hence the Court decided that
the additional work done by B was not
BENCH: W C PETHERAM,
wanted by A and hence B cannot claim
BEVERLEY
anything from A.
the purpose to which the money was to be Section 25 of the Indian Contract Act,
applied, and they knew that on the faith of 1872 states openly that “an agreement
their subscription an obligation was to be made without consideration is void”. In
incurred to pay the contractor for the work. other words, the presence of consideration
Under these circumstances, this kind of is essential for a contract to be valid.
contract arises. The subscriber by
Section 2(d) of the Indian Contract Act, HUSAINI BEGAM
1872, talks of Consideration for a promise
IN ALLAHABAD HIGH COURT
is “When the promisor wishes, the fiancé
or any other person has done or abstained EQUIVALENT CITATIONS
R BENSON, OFFG., K AIYAR year 1896, when she left her husband and
went to her father's house on the ground,
as she alleges, of her husband's
FACTS misconduct. She subsequently sued her
father-in-law for arrears of the monthly
JUDGEMENT
annuity, agreed to be paid to her, up to
1901, and obtained a decree in the terms of
DAVEY, LORD LINDLEY, SIR FORD his mother initiated an action for the
NORTH, SIR ANDREW SCOBLE, SIR declaration of the mortgage as void and
The respondent was a major when Brahmo Dutt and his agents, Mr. Kedar
he executed the mortgage. Nath Mitter and Mr. Dedraj, possessed
knowledge of the respondent’s actual age.
Neither the appellant nor his agent
had any notice that the respondent Since the respondent was a minor at the
was a minor. time of executing the mortgage, the
contract is void.
The respondent made a fraudulent
declaration regarding his age and is JUDGMENT
hence disentitled from seeking any
Though Mr. Brahmo Dutt was not
relief.
personally present at the time of the
The knowledge of the respondent’s transaction, Mr. Mitter acted as his
actual age which Mr. Kedar Nath authorised agent in the transaction and Mr.
Mitter possessed should not be Dedraj too acted under his instructions in
imputed to the appellants as Mr. good faith believing Mr. Mitter to be Mr.
Dedraj acted as the agent of Dutt’s authorised agent. Hence, their
Brahmo Dutt in this transaction. Lordships held that the knowledge of the
respondent’s minority possessed by Mr.
The respondent is estopped by
Mitter was rightly imputed to Mr. Dutt.
section 115 of the Indian Evidence
Act, 1872 from claiming that he Section 115 of the Indian Evidence
executing the mortgage. the instant case as both the parties were
aware of the truth. Further, such provision
The respondent must repay the
was held to be not applicable in the case of
amount advanced according to
minority as held in Nelson v. Stocker 4 De
G. and J. 458 (1859). Their Lordships also instant case was considered to fall
relied on section 19 of the Indian Contract underTransfer of Property Act (1882).
Act (1872) which says that a fraud or
misrepresentation which does not cause Their Lordships, taking into consideration
the consent to a contract of the party on sections 2, 10 and 11 of the Indian
whom such fraud is practised, or to whom Contract Act (1872), held that the Act
such misrepresentation is made, does not makes it essential that all contracting
render the contract voidable. parties should be “competent to contract,”
and expressly provides that a person who
According to section 64 of Indian Contract
by reason of minority is incompetent to
Act (1872), when a person at whose
contract cannot make a contract within the
option a contract is voidable rescinds the
meaning of the Act. Their Lordships also
contract, he must restore to the other party
considered various other provisions of the
any benefits that he might have received
same Act to point out the void nature of a
from that party. Their Lordships found the
contract by a minor. Sec. 68 states that if a
same to be applicable only in the case of
person incapable of entering into a contract
persons competent to contract and not in
or any one whom he is legally bound to
the case of minors who are incompetent to
support is supplied by another person with
contract. The decision of the lower courts
necessaries suited to his condition in life,
to decree in the respondent’s favour
the person who has furnished such supplies
without ordering him to return the money
is entitled to be reimbursed from the
advanced was upheld by the Privy
property of such incapable person.It is
Council.
clear from the Act that a minor is not liable
even for necessaries, and that no demand
The impugned mortgage in the instant case
with respect to the same is enforceable
was executed under the Transfer of
against him by law, though a statutory
Property Act (1882). Section 7 of the
claim is created against his property.
aforementioned Act says that a person
Under sections 183 and 184 no person
must be competent to contract in order to
under the age of majority can employ or be
be competent to transfer property. Section
an agent. Again, under sections 247 and
4 of that Act provides that the chapters and
248, although a person under majority may
sections of that Act which relate to
be admitted to the benefits of a
contracts are to be considered part of the
partnership, he cannot be made personally
Indian Contract Act, 1872. Hence, the
liable for any of its obligations; although
he may on attaining majority accept those to such act or abstinence, he is said to
obligations if he thinks fit to do so. make a proposal. Hence, a proposal is
synonymous to offer. So, we can say that
Their Lordships held that when there was the above definition of the proposal is also
no question of creation of a contract on valid for an offer. According to Section
account of one of the parties being a 2(B) of the Indian Contract Act, 1872,
minor, the question whether such a when the person to whom the proposal is
contract is void or voidable does not arise made signifies his assent thereto, the
at all as the contract itself is void ab initio. proposal is said to be accepted. A
The Indian Contract Act (1872) is proposal, when accepted, becomes a
exhaustive and imperative and clearly promise.
provides that a minor is not capable of
Offer is an open invitation by the promisor
entering into a contract. Their Lordships
for the acceptance of the terms and
further found no merit in interfering with
conditions of the undertaking, which when
the decisions of the lower courts not to
accepted by the promisee becomes binding
order the respondent to return the money
on both parties and the proposal becomes a
advanced. They relied on the decision in
promise. Hence the difference between an
Thurston v. Nottingham Permanent
offer (proposal) and a promise lies in
Benefit Building Society [L. R. (1902)1
acceptance of the offer (proposal).
Ch. 1 (1901); on appeal, L. R. (1903) App.
Cas. 6] wherein it was held that a Court of Under Section 2(h) it is said that an
compel a person to pay any moneys in a contract. American Law defines contract
that person the Legislature has declared to promise or a set of promises for the
be void and rejected the appellants’ claim breach of which the law gives a remedy or
for an equitable remedy. The appeal was the performance of which the law in some
If an infant obtains property or goods by Lord Sumner further repeated the decision
misrepresenting his age, he can be in Sinclair in the case of R. Leslie Ltd v
compelled to restore it so long as the same Sheill that gave an understandable
is traceable in his possession. This is indication about the way that Lord Sumner
known as equitable doctrine of restitution. further helped to develop equity in regard
to this area. Since Sinclair’s decision
However, in present case, since the money
applied the qualification that equity
was spent by the defendant, there was
involves the principle of the receiver to
neither any possibility of tracing it nor any
recognise the obligation, “it is a decision
possibility of restoring the thing got by
which tends to confirm the formulation” as
fraud, for if the court will ask defendant to
is clearly seen in the R. Leslie case.
pay the equivalent sum as that of loan
received, it would amount to enforcing a
This case is about a minor who has lied
void contract. Restitution stops when
about his age in order to obtain a loan from
repayment begins and equity does not
the plaintiff in order to recover the amount
enforce against minor any contractual
of the advances on the reason that they had
obligation.
obtained by fraudulent misrepresentation.
In addition, as such, it was held that, in equitable to do so, require the defendant to
reliance of the formulation exemplified in transfer to the claimant any property
Sinclair, that the minor could be forced to acquired by the defendant under the
pay back the money in which he borrowed. contract, or any property representing it.”.
Accordingly, Sumner’s judgement in this
Yet, the contract was not enforceable.
case brought up the existence of this Act,
Nevertheless, it was held; that “Sheill
and this shows that his decision helped in
could not be sued for deceit because that
the development of equity law.
would make a minor indirectly liable for
an unenforceable contract and the court To conclude, all the above cases
could only order restitution if the lender demonstrate how Lord Sumner helped in
could prove Sheill still possessed the his decisions to develop the equity law.
actual notes and coins he had borrowed.” Moreover, each case affected the
development of equity in a different way.
Efficiently, this evidently shows how the
For example, his decision in Blackwell v
reasoning in Sinclair will be capable to
Blackwell developed the equity in relation
apply as supportive argument in other
to half-secret trusts; the reasoning that was
cases even where the facts of these cases
provided is still in use nowadays in respect
are completely different. As a result, this
of this area of the law, which clearly
makes it easy to realise the method that
exemplifies its significance. Additionally,
Lord Sumner had used to assist in the
the way that Lord Sumner explained and
development of equity; he expanded upon
applied the reasoning in Blackwell
the legal principles which laid down in
exemplifies major the fact that subsequent
another cases such as; Sinclair v
cases applied the reasoning in Blackwell
Brougham.
further highlights the contribution of
Sumner’s explanations to the principle of
For instance, the principles which were
equity law with great clarity. In addition,
identified in Sheill are now accounted for
the decision in Leeds Industrial Co-Op v
under the Minors Contracts Act. Which,
Slack further specifies the importance of
provides that; “in relation to contracts
Sumner’s analysis in regards to damages
entered into after the commencement of
and injunctions ought to be effectuated.
the Act which are unenforceable against
the defendant (or which he repudiates)
Thus, Lord Sumner judgment in this case
because he was a minor when the contract
allows a straightforward explanation of
was made, the court may if it is just and
how damages may be awarded in 34 IND CAS 578, (1917) 32 MLJ 494
substitution for an injunction developed
BENCH
because of Sumner’s decision. In addition,
because succeeded cases have extended SADASIVA AIYAR, J
CITATIONS:
(b) that such a threat was "coercion" and a committing or threatening to commit an
deed brought about by such a threat is not act forbidden by the Penal Code and to the
a deed executed with free consent and unlawful detaining or threatening to detain
property. It means the same thing whether,
(c) that though the threat was not made by
when a man kills himself, it is called an act
the defendants (the parties to the deed) but
of suicide or a successfully accomplished
by their brother, the document was
attempt to commit suicide; and an attempt
voidable as "coercion".
to commit suicide is punishable under the
Used by a person who is not a party to the Penal Code. Hence suicide and an attempt
deed also negatived free consent. On these to commit suicide are acts forbidden by the
findings the plaintiffs suit for cancellation Penal Code though the former cannot be
of the deed was decreed. punished under the code as a dead man
threatening to commit, any act forbidden argued that the "prejudice" to the feelings
by the Indian Penal Code, or the unlawful or to the supposed spiritual welfare of the
detaining, or threatening to detain any wife and son of Swami by the carrying out
property to the prejudice of any person of Swami's threat was not the sort of
whatever, with the intention of causing any prejudice contemplated by Section 15 and
person to enter into an agreement". I think that the "prejudice" to Swami's own life by
the words "any person whatever" have the threatened act was immaterial as ho
been advisedly used by the legislature to was not a party to the deed. It is
indicate that the act need not be to the unnecessary to go into the question
prejudice of the person entering into the whether prejudice or injury to sentiments,
Contract. I think also that the words " to feelings or supposed spiritual welfare is
which are separated by a comma from the coercion in the Contract Act.
"caused" by it. See Section 19 of the The court held in favour of the respondents
Contract Act and the explanation thoreto.) and dismissed the appeal. The court agreed
question whether the release deed was that forbidden act is a wider term. It held
caused by undue influence. The line that suicide and attempt to commit suicide
between coercion (Section 15 of the are both punishable, but suicide is not
(Section 16 of the Act) is sometimes thin person. The court observed that in
definition, the words “to prejudice to any Board of Trade's consent. The company
person whatsoever” are included. The applied, honestly believing that they would
respondents will not execute such a deed get permission because it was a mere
unless they were prejudicially affected by formality. In reality, after the prospectus
the threat of the husband. This case does was issued, permission was refused and
not fall under the undue influence because the company ended up in liquidation.
the husband was not a party to the
Led by Sir Henry Peek, shareholders who
contract. The threat by the husband
had purchased their stakes in the company
amounted to coercion and the appeal by
on the faith of the statement sued the
the younger brothers of the husband was,
directors in misrepresentation.
thus dismissed.
MISREPRESENTATION AND
FRAUD JUDGMENT
that a defendant:
RATIO
1934 that his medical practice had takings entitled to hold his tongue throughout. He
of £2000 pa. However, in May the takings noted that a ‘representation made as a
SIGNIFICANCE
AIR 1976 SC 376, (1976) 1 SCC 311,
This affirms a general principle that any
1976 (8) UJ 15 SC
change to a fundamental reason for
contracting (supervening falsification)
must be communicated, where it is known
BENCH
to one party. It does not matter what the
H KHANNA, P BHAGWATI, S M ALI
reason or motive is for not communicating
is, it need not be malicious or fraudulent,
but merely known to the representor
FACTS
Mr. Sibbal learned Counsel for the the production of the certificate of a
appellant submitted two points before us. competent authority that he has passed the
In the first place it was argued that once examinations which qualified him for
Part II examination held on May 19, 1973 (b) that he has attended a regular course of
his candidature could not be withdrawn for study for the prescribed number of
any reason whatsoever in view of the acadamic years.
mandatory provisions of Clause 2(b) of the
Certificate (b) will be provisional and can
Kurukshetra University Calender Vol. I,
be withdrawn at any time before the
Ordinance X under which the candidature
examination if the applicant fails to attend
could be withdrawn before the candidate
the prescribed course of lectures before the
took the examination. Secondly it was
end of his terra.
argued that the order of the University was
mala fide because the real reason for The last part of this statute clearly shows
canceling the candidature of the appellant that the University could withdraw the
was the insistence of the District Education certificate if the applicant had failed to
Officer that the appellant should not have attend the prescribed course of lectures.
been admitted to the Law Faculty unless But this could be done only before the
he had obtained the permission of his examination. It is, therefore, manifest that
superior officers. In order to appreciate the once the appellant was allowed to take the
first contention it may be necessary to examination, rightly or wrongly, then the
extract the relevant portions of the statute statute which empowers the University to
contained in Kurukshetra University withdraw the candidature of the applicant
has worked itself out and the applicant before submitting the form to the
cannot be refused admission subsequently University to see that the form complied
for any infirmity which should have been with all the requirements of law. If neither
looked into before giving the applicant the Head of the Department nor the
permission to appear. It was, however, University authorities took care to
submitted by Mr. Nandy learned Counsel scrutinise the admission form, then the
for the respondent that the names of the question of the appellant committing a
candidates who were short of percentage fraud did not arise. It is well settled that
were displayed on the Notice Board of the where a person on whom fraud is
College and the appellant was fully aware committed is in a position to discover the
of the same and yet he did not draw the truth by due diligence, was fraud is not
attention of the University authorities proved. It was neither a case of suggestion
when he applied for admission to appear in falsi, or suppression yeri. The appellant
LL.B Part II Examination, Thus the never wrote to the University authorities
appellant was guilty of committing serious that he attended the prescribed number of
fraud and was not entitled to any lectures. There was ample time and
indulgence from this Court. opportunity for the University authorities
to have found out the defect. In these
It appears from the averments made in the
circumstances, therefore, if the University
counter-affidavit that according to the
authorities acquiesced in the infirmities
procedure prevalent in the College the
which the admission form contained and
admission forms are forwarded by the
allowed the appellant to appear in part I
Head of the Department in December
Examination in April 1972, then by force
preceding the year when the Examination
of the University Statute the University
is held. In the instant case the admission
had no power to withdraw the candidature
form of the appellant must have been
of the appellant. A somewhat similar
forwarded in December 1971 whereas the
situation arose in Premji Bhai Ganesh Bhai
examination was to take place in
Kshatriya v. Vice Chancellor, Ravishankar
April/May 1972. It is obvious that during
University, Raipur and Ors. where a
this period of four to five months it was
Division Bench of the High Court of
the duty of the University authorities to
Madhya Pradesh observed as follows:
scrutinise the form in order to find out
whether it was in order, Equally it was the From the provisions of Ordinance Nos. 19
duty of the Head of the Department of Law and 48 it is clear that the scrutiny as to the
requisite attendance of the candidates is would not have stood in the way of the
required to be made before the admission University authorities in cancelling the
cards are issued. Once the admission cards candidature of the appellant.
are issued permitting the candidates to take
As regards the second point that the order
their examination, there is no provision in
was passed malafides, it is difficult to find
Ordinance No. 19 or Ordinance No. 48
any evidence of malafides in this case. The
which, would enable the Vice-Chancellor
order suffers from yet another infirmity.
to withdraw the permission. The discretion
The annexures filed by the appellant and
having been clearly exercised in favour of
the respondent as also the allegations made
the petitioner by permitting him to appear
in the counter-affidavit clearly show that
at the examination, it was not open to the
there were series of parleys and
Vice-Chancellor to withdraw that
correspondence between the District
permission subsequently and to withhold
Education Officer and the respondent in
his result.
the course of which the respondent was
We find ourselves in complete agreement being persuaded, to the extent of
with the reasons given by the Madhya compulsion, to withdraw the candidature
Pradesh High Court and the view of law of the appellant because he had not
taken by the learned Judges. In these obtained the permission of his superior
circumstances, therefore, once the officers. Mr. Nandy appearing for the
appellant was allowed to appear at the respondent has not been able to show any
Examination in May 1973, the respondents provision in the statutes of the University
had no jurisdiction to cancel his which required that the candidates
candidature for that examination. This was attending the evening law classes who are
not a case where on the undertaking given in service should first get the prior
by a candidate for fulfilment of a specified permission of their superior officers. We
condition a provisional admission was have also perused the University Statute
given by the University to appear at the placed before us by counsel for the
examination which could be withdrawn at appellant and we do not find any provision
any moment on the non-fulfilment of the which could have afforded justification for
aforesaid condition. If this was the the respondent to cancel the candidature of
situation then the candidate himself would the appellant on the ground that he had not
have contracted out the statute which was obtained the previous permission of his
for his benefit and the statute therefore superior officers.
Mr. Nandy counsel for the respondent in not scrutinising the admission form of
placed great reliance on the letter written the appellant before he forwarded the same
by the appellant to the respondent wherein to the University.
he undertook to file the requisite
Moreover, the stand taken by the
permission or to abide by any other order
respondent that as the appellant did not get
that may be passed by the University
the requisite permission from his superior
authorities. This letter was obviously
officers, therefore he was not allowed to
written because the appellant was very
appear at the examination, does not merit
anxious to appear in Part II Examination &
consideration, because the impugned order
the letter was written in terrorem and in
does not mention this ground at all and it
complete ignorance of his legal rights. The
was not open to the respondent to have
appellant did not know that there was any
refused admission to the appellant to LL.B.
provision in the University Statute which
Part III or for that matter to refuse
required that he should obtain the
permission to appear at the examination on
permission of his superior officers. But as
a ground which was not mentioned in the
the respondent was bent on prohibiting
impugned order.
him from taking the examination he had no
alternative but to write a letter per force. It Having gone into the circumstances
is well settled that any admission made in mentioned above, we are of the view that
ignorance of legal rights or under duress the impugned orders suffers from errors of
cannot bind the maker of the admission. In law patent on the face of the record, and in
these circumstances we are clearly of the any event this was not a case which should
opinion that the letter written by the have been dismissed by the High Court in
only the University authorities would have The appeal in accordingly allowed and the
exercised proper diligence and care by order of the University dated June 26,
scrutinising the admission form when it 1973, is hereby quashed by a writ a
was sent by the Head of the Department to certiorari. The respondent is directed to
the University as far back as December declare the result of LL.B. Part II
1971 they could have detected the defects Examination in which the appel ant had
or infirmities from which the form appeared on May 19, 1973 and also to give
suffered according to the University him an opportunity to appear in the three
Statute. The Head of the Department of subjects in which he had failed in LL.B.
Law was also guilty of dereliction of duty
Part I Examination, at the next
examination which may be held by the
University.
UNDUE INFLUENCE
MANU SINGH
UMA DATT
FACTS
MISTAKE
CUNDY
LINDSAY
HOL OF UK
BENCH
BLACKBURN J.,
LORD CAIRNS
FACTS
JUDGMENT
anybody who takes them from him with Co had meant to deal only with Blenkiron
notice; but where a person has bonâ fide & Co. There could therefore have been no
acquired an interest in the goods, you agreement or contract between them and
cannot, as against that person, avoid the the rogue. Accordingly, title did not pass
contract. Where the goods have come into to the rogue, and could not have passed to
BRYMER
DEVELOPMENTS
payment. because
At 11 a.m. on June 24, 1902, the plaintiff (1) both parties thought, at the time they
entered into a verbal agreement with entered the contract, that the parade would
defendant’s agents, to take the room for (2) this mistaken belief goes “to the whole
the purpose of viewing the procession on root of the matter.”
June 26, and handed over his cheque for
100 pounds. It was admitted that the
decision to operate on the King, which INGRAM V LITTLE
rendered the procession impossible, had
[1961] 1 QB 31
been reached at about 10 a.m. that
morning. But neither party was aware of
this fact when the agreement was entered BENCH
into and the cheque given; and it was
PEARCE LJ, DEVLIN LJ
contended for the plaintiff that as both
parties were under a misconception with
regard to the existing state of facts about FACTS
which they were contracting, the plaintiff
The Plaintiffs were joint owners of a car.
was entitled to the return of his money
A fraudster attempted to purchase the car
by cheque, which they initially refused. He possessory title from being passed to the
pretended to be a reputable businessman fraudster and then on to the defendant.
and the Plaintiffs then accepted payment
by cheque. The cheque dishonoured the
next day. By then, the fraudster had sold BAI VIJILI
HELD
FACTS
The Plaintiffs claim was successful. The
The Respondent had advanced money to
court applied the general principle of the
the Appellant who was a married woman
process of forming a binding contract to
in order to enable her to obtain a divorce
the current facts. Where an offeror makes
from her husband. He promised to marry
an offer to the promisee, the offeror is
her as soon as she was divorced. He then
making such an offer only with the person
sued to recover the advances he had made.
identified and no one else. The fraudster
pretended to be a well known business JUDGEMENT
man and that was the only reason why the
The object of the agreement with the wife
Plaintiffs accepted payment by cheque, as
to divorce her husband and marry the
initially they had refused. The contract for
Respondent was immoral and, therefore,
sale was therefore only made with the
the agreement was void. Hence the
wealthy businessman and not the fraudster
Respondent could not recover the money
in his personal capacity. Thus, the fact that
he had advanced.
the fraudster used someone else’s identity
to make the contract prevented a contract
from being formed. It also prevented the SM. SUMITRA DEVI AGARWALLA
VS plaintiff's cape is that on November 2,
1973, she entered into a contract of lease
SM. SULEKHA KUNDU AND ANR.
of the suit premises with the defendants on
AIR 1976 CAL 196 certain terms and conditions. Pursuant to
(1976) 1 COMPLJ 333 CAL the said agreement, the plaintiff advanced
to the defendant No. 2 as the agent of the
defendant No. 1, a total sum of Rs. 16,000
BENCH on diverse dates between November 7,
1973 and February 19, 1974 out of the sum
M DUTT, SHARMA
of Rs. 20,000 agreed to be paid by the
FACTS
plaintiff under the contract, so as to enable
This appeal is at the instance of the the defendants to complete the renovation
plaintiff and it is directed against the order of the suit premises. It is alleged that the
dated October 1, 1975 of the learned defendants failed and neglected to deliver
Judge, 8th Bench, City Civil Court, possession of the suit premises to the
Calcutta, dismissing the plaintiff's plaintiff even though the plaintiff offered
application for recording a compromise in to pay the balance sum of Rs. 4,000. On
adjustment of the suit under Order 23, the aforesaid allegations, the plaintiff has
Rule 3 of the Code of Civil Procedure. The claimed a decree for specific performance
suit was instituted by the plaintiff for of the contract of lease by letting out the
specific performance of a contract of lease suit premises to her at a monthly rental of
dated November 2, 1973, for khas Rs. 400.
possession of the suit premises and for a
The plaintiff also filed an application for
permanent injunction restraining the
temporary injunction under Order 39,
defendants from letting out the suit
Rules 1 and 2 of the Code of Civil
premises to any person other than the
Procedure praying for restraining the
plaintiff. The suit premises is the first floor
defendants from letting out or parting with
of premises No. 310, Rabindra Sarani,
the possession of the suit premises to any
Calcutta. It is not, disputed that the
person other than the plaintiff till the
defendant No. 1 Sm. Sulekha Kundu is the
disposal of the suit. Before the application
owner of the said premises. The defendant
for temporary injunction was disposed of,
No. 2 Kestodas Kundu is the husband's
on January 14, 1975, the plaintiff filed the
elder brother of Sulekha Kundu. The
application under Order 23, Rule 3 inter
alia alleging therein that on October 13, opposed the said application under Order
1974, due to the intervention of common 23, Rule 3 by petitions of objection. They
friends, the parties settled the disputes have denied the allegations made by the
between them in the presence of their plaintiff in the said application. It has been
respective lawyers. The terms of averred by Sulekha Kundu that she was
settlement were recorded in writing in the made to sign the said letter under duress
form of a letter addressed by the defendant and threat without the knowledge of the
No. 1 Sulekha Kundu to the plaintiff. The contents thereof and without any
original, and duplicate letters bearing the independent legal advice. It is contended
signatures of the defendant were detained that the said purported agreement is void
by Shri Sunil Krishna Dutta, Advocate, and not legally enforceable. Further, it is
representing the defendants in the matter. contended that the terms of the said
It is alleged that a true copy of the said alleged agreement are not lawful. It is also
letter was handed over to the plaintiff her case that Sunil Krishna "Dutta,
through her husband Krishna Kumar Advocate was never engaged by her and
Agarwal (hereinafter referred to as she had no occasion to give any instruction
Agarwal). A copy of the said letter to him. The said Sunil Krishna Dutta was
incorporating the terms of settlement acting on behalf of and represented the
agreed to by the parties has been annexed defendant No. 2 Kestodas Kundu. She has
to the application. It is alleged that the enumerated the circumstances under which
defendants deliberately and with an she was compelled to sign the said letter in
ulterior motive have backed out from the duplicate containing the terms and
said terms and are not willing to perform conditions of the purported settlement.
their part of the agreement, though the
JUDGEMENT
plaintiff at all material times was and is
still ready and willing to abide by the The learned Judge after considering the
same. Accordingly, it has been prayed by evidence and the facts and circumstances
the plaintiff that the terms and conditions of the case has held that the said agreement
referred to in the letter dated October 13, is in the nature of an executory contract
1974 should be recorded and the suit and not a concluded one and, as such, does
should be decreed on the said terms. not come within the purview of Order 23,
Rule 3; that the consideration for the
The defendant No. 1 Sulekha Kundu and
agreement was unlawful and opposed to
the defendant No. 2 Kestodas Kundu both
public policy and, consequently, the
agreement was hit by Section 23 of the the suit, the Court shall order such
Contract Act and that, the agreement was agreement, compromise or satisfaction to
not read over and explained to Sulekha be recorded, and shall pass a decree in
Kundu before she put her signature accordance therewith so far as it relates to
thereon. It has been held by him that the the suit."
plaintiff has failed to satisfy the Court that
Mr. Dutt has placed before us a number of
the suit has been wholly or partly adjusted
decisions of different High Courts in
by a lawful agreement or compromise.
support of his contention. The first of such
Upon the aforesaid findings, he has
decisions on which reliance has been
dismissed the application under Order 23,
placed by him is a Bench Decision of the
Rule 3. Hence, this appeal,
Allahabad High Court consisting of
The first question that arises is whether the Sulaiman and Kendall JJ. in Quadri Jahen
documents, Exts. 1 and 1 (a) embodying Begum v. Fazal Ahmad, ILR 50 All 748 =
the purported terms of settlement have (AIR 1928 All 494). In that case, it has
been executed by the defendant No. 1 been observed as follows;
Sulekha Kundu under threat and coercion.
"In our opinion the word "lawful" in Order
It has, however, been strenuously urged by
XXIII, Rule 3, does not merely mean
Mr. B.C. Dutt, learned Advocate appearing
binding or enforceable. A contract which
on behalf of the plaintiff-appellant that an
is brought about either by undue influence,
enquiry as to whether an agreement in
misrepresentation or fraud is, under
adjustment of the suit is vitiated by fraud,
Sections 19 and 19-A of the Indian
undue influence or coercion does not come
Contract Act, merely avoidable and not
within the purview of the provision of
absolutely illegal or unlawful. Section 23
Order 23, Rule 3. In order to consider this
of the Act indicates when the consideration
contention, we may refer to the provision
or object of an agreement is unlawful.
of Order 23, Rule 3 which provides as
These are cases where it is forbidden by
follows:
law or is of such a nature that, if permitted,
"Where it is proved to the satisfaction of it would defeat the provisions of any law,
the Court that a suit has been adjusted or is fraudulent, or involves or implies
wholly or in part by any lawful agreement injury to any person or property, or where
or compromise, or where the defendant the court regards it as immoral or opposed
satisfies the plaintiff in respect of the to public policy. We think that the word
whole or any part of the subject-matter of "lawful" in Order XXIII, Rule 3, refers to
agreements which in their very terms or Is it that the satisfaction of the Court is
nature are not "unlawful", and may confined only to the proof of the signatures
therefore include agreements which are of the parties on the document containing
avoidable at the option of one of the the terms? Even in spite of the fact that the
parties thereto because they have been signature of a party or his consent to the
brought about by undue influence, agreement has been obtained by the other
coercion or fraud." party by some illegal means, namely, by
fraud, undue influence or coercion, would
It has been further observed that it is
the Court be able to hold that there is an
possible to take the view that,
agreement? With respect, we are unable to
independently of Order XXIII, Rule 3, the
understand the principle of law laid down
Court has inherent jurisdiction under
in those two decisions. It has been already
Section 151 of the Cede to refuse to record
observed that if the consent of one party is
a compromise which has been brought
obtained by fraud, undue influence or
about by undue influence.
coercion, it cannot be said that he has
It is clear from Order 23, Rule 3 that agreed to the term to which his consent has
before the Court considers whether, or not been so obtained and consequently the
an agreement is lawful, it must be satisfied Court has to come to the finding that there
that there has been an agreement between is no agreement. If it is required under
the parties. An agreement is brought into Order 23, Rule 3 that the Court has to be
existence where one party makes an offer satisfied as to whether an agreement has in
and another accepts the same. It is the fact been reached as held by the Allahabad
consensus of minds of two persons in High Court in the above two decisions, we
regard to certain matter. Of these two are of the opinion that an enquiry by the
persons if one has not agreed to the term Court for such satisfaction will include
proposed by the other, there is no also an enquiry into the allegation of a
agreement between them. When the party that his consent to the terms of the
consent of one to the term is obtained by agreement has been procured by fraud,
the other by some illegal means, namely, undue influence or coercion. It is true that
by fraud, coercion or undue influence, it is fraud, undue influence or coercion makes a
difficult to hold that the person whose contract a avoidable one and not void. But
consent has been so obtained has agreed to as soon as a party complains about the
the term. practice upon him of fraud, undue
influence or coercion by another party, he
avoids the contract. If the party complains or consideration is unlawful is void, it
to Court that his signature to a document provides inter alia that the consideration or
containing the terms has been obtained by object of an agreement is unlawful when it
the other party at the point of a revolver, is opposed to public policy It is now well
would the Court refuse to make an enquiry settled that where the consideration of an
into the same on the ground that the agreement is the withdrawal and non-
agreement is only avoidable and not void? prosecution of a criminal case, the
With due respect, we are unable to agreement is opposed to public policy and
subscribe to such a bold proposition and, is void.
in our opinion, to consider whether or not
For the reasons aforesaid, we affirm the
an agreement has been reached between
order of the learned Judge dismissing the
the parties, the Court will of necessity
plaintiff's application under Order 23, Rule
embark upon an enquiry as to the
3 of the Code of Civil Procedure and
allegation of a party that his consent to the
dismiss the appeal with costs. No separate
"agreement or his signature on the
order need be passed in the connected
document containing the terms, has been
Rule, which shall be deemed to have been
obtained by fraud, undue influence or
disposed of without any order as to costs,
coercion. It is true that the party
Sharma, J.
complaining has his remedy by way of suit
He can obtain a declaration that the con- PEARCE
The question on severability was whether the seller an absolute and indefeasible right
the reasonable restriction could be to start a rival business the day after he
enforced when it was in the same contract sold. Accordingly it has been determined
restriction. The court used the test of purchaser, for his own protection, obtains
whether striking out (with a blue pencil) an obligation restraining the seller from
words containing unreasonable provisions competing with him, within bounds which
would leave behind a contractual having regard to the nature of the business
obligation that still made sense. If it did, are reasonable and are limited in respect of
then the amended contract would be space, the obligation is not obnoxious to
amended agreement that Nordenfelt "for of restraint of trade: ‘In the age of Queen
the next 25 years, would not make guns or Elizabeth all restraints of trade, whatever
ammunition anywhere in the world , thus they were, general or partial, were thought
permitting him to trade in those very items to be contrary to public policy, and
in direct competition with Maxim, therefore void.’ and ‘The true view at the
illustrating the limited practical utility of present time I think, is this: The public
the rule under its strike-out only stricture. have an interest in every person’s carrying
At common law a restraint of trade is on his trade freely: so has the individual.
All interference with individual liberty of
action in trading, and all restraints of trade
(1905) ILR 29 BOM107
of themselves, if there is nothing more, are
contrary to public policy, and therefore
void. That is the general rule. But there are BENCH
exceptions: restraints of trade and
SIR LAWRENCE JENKIM, K.C.I.E.
interference with individual liberty of
CHIEF JUSTICE AND JUSTICE
action may be justified by the special
BATCHELOR
circumstances of a particular case. It is a
sufficient justification, and indeed it is the
only justification, if the restriction is
FACTS
reasonable – reasonable, that is, in
In March 1903, certain Ice Manufacturing
reference to the interests of the parties
Companies in Bombay entered into an
concerned and reasonable in reference to
agreement relating to the manufacture and
the interests of the public, so framed and
sale by them of ice. The agreement fixed,
so guarded as to afford adequate protection
inter alia, the minimum price at which ice
to the party in whose favour it is imposed,
was to be sold by the parties the proportion
while at the same time it is in no way
of the manufacture which earlier was to
injurious to the public.’
bear, and the proportion of the profits
RATIO
which, each was to receive. It farther
he purchaser of the goodwill of a business created a monthly obligation to pay into
sought to enforce a covenant in restraint of and a corresponding right to receive from,
trade given by the seller. a general common fund the different if
any, between the profits actually received
by the parties and those to which they
were, under the agreement, entitled. On a
suit being instituted for breach of the
agreement, in which damages, sustained
S.B.FRASER AND COMPANY
prior to and pending the hearing of the
V suit, were claimed.
The plaintiff sued the defendants, for that limits appear to the Court reasonable,
the plaintiff having opened a shop in regard being had to the nature of the
Calcutta, for the sale of copper utensils, As what constitutes restraint of trade is
the defendants proposed to the plaintiff to summarized in Halsbury’s Laws of
cease carrying on the said business in the England , where it is opined that it is a
said locality, on the ground of its being general principle of the Common Law that
detrimental to their business, and offered a man is entitled to exercise any lawful
and agreed in consideration of his doing so trade or calling as and when he wills and
to pay to the plaintiff all sums which he the law has always regarded jealously any
had then disbursed as advances to interference with trade, even at the risk of
workmen, whereupon the plaintiff did interference with freedom of contract, as it
agree and consent to cease carrying on the is public policy to oppose all restraints
said business, and did accordingly cease; upon liberty of individual action which are
and that the defendants have neglected and injurious to the interests of the State. In
refused to perform their part of the deciding whether a contractual term
contract, to wit, to reimburse the plaintiff amounts to a restraint of trade, the Court
in all same that he had advanced to looks not at the form of the term but its
workmen, whereby the plaintiff has effect. It was held that the doctrine can
sustained damages to the amount stated, therefore apply to indirect restrictions,
namely, Rs.900. such as a financial incentive not to
Section 27- "Every agreement by which compete with the employer. Agreements in
any one is restrained from exercising a restraint of trade are extremely common
and it would be intolerable hindrance to profits actually raoexved by the parties and
business if they were not allowed. those to which they were, under the
agreement, entitled. On a suit being
instifcnted for breach o£ the agreement, in
S. B. FRASER AND COMPANY which damages, sustained prior to and
The court had a number of issues to (a) A agrees to sell B “a hundred tons of
decide. The most prominent issue was oil”. There is nothing whatever to show
whether the offer from the buyer, to pay what kind of oil was intended. The
more for the horse if it was lucky, could be agreement is void for uncertainty. (a) A
considered to be a valid offer for the agrees to sell B “a hundred tons of oil”.
purposes of the sale. This would give an There is nothing whatever to show what
indication as to whether the seller could kind of oil was intended. The agreement is
rely on the payment that had been void for uncertainty."
mentioned. Specifically, the court was
(b) A agrees to sell B one hundred tons of
required to understand whether the terms
oil of a specified description, known as an
‘lucky’ and ‘buy another horse’ could be
article of commerce. There is no
defined and considered legally binding on
uncertainty here to make the agreement
the parties.
void. (b) A agrees to sell B one hundred
JUDGEMENT tons of oil of a specified description,
known as an article of commerce. There is (f) A agrees to sell to B “my white horse
no uncertainty here to make the agreement for rupees five hundred or rupees one
void." thousand”. There is nothing to show
which of the two prices was to be given.
(c) A, who is a dealer in coconut-oil only,
The agreement is void. (f) A agrees to sell
agrees to sell to B “one hundred tons of
to B “my white horse for rupees five
oil”. The nature of A’s trade affords an
hundred or rupees one thousand”. There
indication of the meaning of the words,
is nothing to show which of the two prices
and A has entered into a contract for the
was to be given. The agreement is void."
sale of one hundred tons of coconut-oil.
(c) A, who is a dealer in coconut-oil only,
agrees to sell to B “one hundred tons of
DISCHARGE BY PERFORMANCE
oil”. The nature of A’s trade affords an
indication of the meaning of the words, STARTUP
breached the contract? and wait till a reasonable time, for the
purpose of receiving what the other party
is bound to deliver”. If the party bound to
HELD: deliver doesn’t come at the reasonable
place till the reasonable hour, other party
isn’t bound to wait any further and if
1) The promisee must have a reasonable
former comes after latter has departed, he
opportunity of ascertaining that the thing
by his own conduct has rendered tender to
offered by promisor is thing which latter is
be made impossible.
bound to deliver. (S.38-2)
before specified time, and fails to do any essence of the contract even if they were
such thing at or before the specified time, not expressed to be so and were construed
been performed, becomes voidable at the the common law rule in respect of such
option of the promisee, if the intention of contracts and did not regard the stipulation
the (1) L.R. 43 I.A. 26. as to time as not of the essence of the
bargain. As stated in Halsbury's Laws of
parties was that time should be of the
England, 3rd ed., vol. 3, art. 281, p. 165
essence of the contract." In Jemshed's
"An option for the renewal of a lease, or
case(1) Viscount Haldane observed that
for the purchase or re-purchase of
the section did not lay down any principle
property, must in all cases be exercised
as regards contracts to sell land in India
strictly within the time limited for the
different from those which obtained under
purpose, otherwise it will lapse." This
the law of England. It is well known that
passage was quoted with approval by
in the exercise of its jurisdiction to decree
Danckwerts L.J. in Hare v. Nicoll(2). A
specific performance of contracts the
similar statement of law is to be found in
Court of Chancery adopted the rule,
Foa's General Law of Landlord and
Tenant, 8th Art. 453, p. 310, and in Hill surprise or ignorance not wilful, parties
and Redman's Law of Landlord and may have been prevented from executing it
Tenant, 14th ed., p. 54. The reason is that a literally, a Court of Equity, will interfere;
renewal of a lease is a privilege and if the and upon compensation bei ng made, the
tenant wishes to claim the privilege he party having done everything in his power,
must do so strictly within the time limited and being prevented by means, I have
for the purpose. With regard to equitable alluded to, will give relief ... I decide this
relief against the failure of the tenant to case upon the principles on which, Lord
give notice of renewal within the stipulated Thurlow decided (Bayley v. The
time. the law is accurately stated in Corporation of Leominster 1792, 1 Ves.
Halsbury's Laws of England, 3rd ed.,vol. 476), and I hope now, it will be known,
23, p. 626, Art. 1329, footnote (u) that it is expected, these covenants shall be
thus :--"Relief will not be given in equity literally performed where it can be done;
against failure to give notice in time, save and that Equity will interpose, and go
under special circumstances. The decided beyond the stipulations of the covenant at
cases show that in such cases relief is not law, only where a literal performance has
given in equity save upon the ground of been prevented by the means,-I have
unavoidable accident, fraud, surprise, mentioned, and no injury is done to the
ignorance not wilful or inequitable conduct lessor?' We are of the opinion that the
on the part of the lessor precluding him stipulation as to time in clause 3 (c) of the
from refusing to give the renewal. The indenture of lease dated February 17, 1954
limits of the equitable interference in such should be regarded as of the essence of the
cases were clearly stated by the Master of contract." The appellant not 'having
the Rolls (Sir R.P.Arden) in Eaton v. exercised the option of renewal within the
Lyon.(3) He observed :- "At law a time limited by the 'clause is not entitled to
covenant must be strictly and literally a renewal.
performed; in equity it must be really and
substantially.
The appellant claims relief against the
consequences of its default on the grounds
performed according to the true intent and enumerated in paragraphs 13 and 14 of the
meaning of the parties so far as plaint. Grounds (b) and (e) cannot be
circumstances will admit; but if regarded as special circumstances. As. to
unavoidable accident, if by fraud, by ground (d), it is. not shown that the service
station is of immense public utility. The case, the lease fixes a time within which
fact that the appellant constructed a service the application for renewal is to be made.
station is an irrelevant consideration. The time so fixed is of the essence of the
Ground (c) is not established and it is not bargain. The tenant loses his right unless
'shown that the time is not of the essence he makes the application within the
of the bargain. As to ground (a) there is stipulated time. Equity will not relieve the
some evidence to show that the delay in tenant from the consequences of his own
giving the notice of renewal was due to neglect which could well be avoided with
oversight. But it is not shown that the reasonable diligence.
delay was due to any unavoidable
The appeal is dismissed with costs.
accident, excusable ignorance, fraud or
surprise. The delay arose from mere
neglect on the part of the appellant and
could have been avoided by reasonable
IMPOSSIBILITY EXISTING AT THE
diligence. As observed 'by the Master of
TIME OF CONTRACT
the Rolls in Reid & Anr. v. Grave &
Others(1): "The rule is now well
established, that no accident will entitle a
party to renew unless it be unavoidable. I
am of opinion, that nothing but accident, COUTURIER
which, could not have been avoided by V
reasonable diligence, will entitle the
HASTIE
plaintiff to a renewal in this Court."
& Tenant, 8th ed., article 455, pp. 311-12, MR. BARON ALDERSON, MR.
Ram Lal (1) 9 L.J. Ch, 245, 248. JUSTICE WIGHTMAN, MR.
Dubey v. Secretary of State for India (1), JUSTICE CRESWELL, MR. JUSTICE
with primage and average accustomed." the cargo became so heated that the vessel
On the 23d February the ship sailed on the was obliged to put into, Tunis, where, after
homeward voyage. On the 1st May 1848, a survey and other proceedings, regularly
Messrs. Bernouilli, the London agents of and bona fide taken, the cargo was, on the
the Plaintiffs, and the persons to whom the 22d April, unloaded and sold. It did not
bill of lading had been indorsed, employed appear that either party knew of these
the Defendants to sell the cargo, and sent circumstances: at the time of the sale. The
them the bill of lading, the charterparty, contract having been made on the 15th of
and the policy of insurance, asking and May, Mr. Callander, on the 23d of May,
Desiring to secure the rental of Krell's flat Tuesday next the 24th instant.
for the purpose of observing the coronation The parties agreed on a price of £75, but
procession, Henry wrote the following nowhere in their written correspondence
letter to Krell's solicitor: mentioned the coronation ceremony
I am in receipt of yours of the 18th instant, explicitly. Henry paid a deposit of £25 to
inclosing form of agreement for the suite Krell for the use of the flat, but when the
of chambers on the third floor at 56A, Pall procession did not take place on the days
Mall, which I have agreed to take for the originally set, on the grounds of the King’s
two days, the 26th and 27th instant, for the illness, Henry refused to pay the remaining
sum of 75l. For reasons given you I cannot £50. Krell brought suit against Henry to
enter into the agreement, but as arranged recover the remaining balance of £50, and
over the telephone I enclose herewith Henry countersued to recover his deposit
cheque for 25l. as deposit, and will thank in the amount of £25.
JUDGEMENT
conveyance within one month from the August 1940, between the first and the
receipt of the letter by paying the balance second defendant, or rather his nominee,
of the consideration money and take the the plaintiff, was still subsisting; and
Where one person has promised to do their bargain, it can very well be said that
something which he knew, or, with the promisor found it impossible to do the
reasonable diligence, might have known, act which he promised to do. Although
and which the promisee did not know to be various theories have been propounded by
impossible or unlawful, such promisor the Judges and jurists in England regarding
must make compensation to such promisee the juridical basis of the doctrine of
for any loss which such promise sustains frustration, yet the essential idea upon
promise to perform an impossibility The that so far as the courts in this country are
parties shall be excused, as Lord Loreburn concerned, they must loot primarily to the
change of circumstance occurs which is so in the extreme form that the doctrine of
striking at the root of the contract as a does no come at all within the purview of
whole, it is the court which can pronounce section 56 of the Indian Contract Act
The court undoubtedly has to examine the contention raised by the Attorney General
contract and the circumstances under can be disposed of in few words. It is true
which it was made. The belief, knowledge that in England the judicial opinion
and intention of the parties are evidence, generally expressed is, that the doctrine of
but evidence only on which the court has frustration does not operate in the case of
to form its own conclusion whether the contracts for sale of land. But the reason
altogether the basis of the adventure and English law as soon as there is a concluded
its underlying object. This may be called a contract by A to sell land to B at certain
rule of construction by English Judges but price, B becomes in equity, the owner of
it is certainly not a, principle of giving the land, subject to his obligation to pay
effect to the intention of the parties which the purchase money'. On the other hand, A
underlies all rules of construction. This is in spite of his having the legal estate holds
the same in trust for the purchaser and It is well settled and not disputed before us
whatever rights he still retains in the land that if and when there is frustration the
are referable to his right to recover and dissolution of the contract occurs
receive the purchase money. The rule of automatically. It does not depend, as does
frustration can only put an end to purely rescission of a contract on the ground of
contractual obligations, but it cannot repudiation or breach, or on the choice or
destroy an estate in land which has already election of either party.
accrued in favour of a contracting party.
of what has actually happened on the
According to the Indian law, which is
possibility of performing the contract.
embodied in section 54 of the Transfer of
What happens generally in such cases and
Property Act, a contract for sale of land
has happened here is that one party claims
does not of itself create any interest in the
that the contract has been frustrated while
property which is the subject-matter of the
the other party denies it. The issue has got
contract. The obligations of the parties to a
to be decided by the court "ex post facto,
contract for sale of land are, therefore, the
on the actual circumstances of the case".
same as in other ordinary contracts and
We will now proceed to examine the
consequently there is no conceivable
nature and terms of the contract before us
reason why the doctrine of frustration
and the circumstances under which it was
should not be applicable to contracts for
entered into to determine whether or not
sale of land in India. This contention of the
the disturbing element, which is allowed to
Attorney General must, therefore, fail.
have happened here, has substantially
We now come to the last and most prevented the performance of the contract
important point in this case which raises as a whole.
the question as to whether, as a result of
It may be stated at the outset that the.
the requisition orders, under which the
contract before us cannot be looked upon
lands comprised in the development
as an ordinary contract for sale and
scheme of the defendant company were
purchase of a piece of land; it is an integral
requisitioned by Government, the contract
part of a development scheme started by
of sale between the defendant company
the defendant company and is one of the
and the plaintiff's predecessor stood
many contracts that have been entered into
dissolved by frustration or in other words
by a large number of persons with the
became impossible of performance.
company. The object of the company was
undoubtedly to develop a fairly extensive
area which was still undeveloped and risks and difficulties involved in carrying
make it usable for residential purposes by on operations like these, could not but be
making roads and constructing drains in the contemplation of the parties at the
through it. The purchaser. on the other time when they entered into the contract,
hand, wanted the land in regard to which and that is probably the reason why no
he entered into the contract to be definite time limit was mentioned in the
developed and make ready for building contract within which the roads and drains
purposes before he could be called upon to are to be completed. This was left entirely
complete the purchase. The most material to the convenience of the company and as
thing which deserves notice is, that there is at matter of fact the purchaser did not feel
absolutely no time limit within which. the concerned about it. It is against this
roads and drains are to be made. The background that we are to consider to what
learned District Judge of Alipore, who extent the passing of the requisition orders
heard the appeal, from the trial court's affected the performance of the contract in
judgment found it as a fact, on the the present case.
evidence in the record, that there was not
an understanding between the parties on
this point. As a matter of fact, the first The company, it must be admitted, bad not
requisition order was passed nearly 15 commenced the development work when
months after the contract was made and the requisition order was passed in
apparently no work was done by the November, 1941. There was no question,
The learned Judges of the High Court in conditions at the time when it was entered
deciding the case against the plaintiff into, the extent of the work involved in the
relied entirely on the time factor. It is true development scheme and last though not
that the parties could not contemplate an the least the total absence of any definite
fulfil their contract. They might certainly within which the work was to be
have in mind a period of time which was completed, it cannot be said that the
reasonable having regard to the nature and requisition order vitally affected the
BENCH SUBMISSIONS
LORD KENYON CJ, ASHHURST J, The arguments for the plaintiff, Mrs
GROSE J, LAWRENCE J Cutter, went as follows.
Cutter agreed he would sail with Powell proportionable part of the wages on a
from Kingston, Jamaica to Liverpool, quantum meruit for work and labour done
by the intestate during that part of the policy, and was introduced as a mean of
voyage that he lived and served the preserving the ship. But that rule cannot
defendant; as in the ordinary case of a apply to this case; for there the sailor
contract of hiring for a year, if the servant forfeits his wages by his own wrongful act,
die during the year, his representatives are whereas here the canon was prevented
entitled to a proportionable part of his completing his contract by the act of God.
wages. If any defence can be set up against
So if a mariner be impressed, he does not
the present claim, it must arise either from
forfeit his wages; for in Wiggins v
some known general rule of law respecting
Ingleton Lord Holt held that a seaman,
marine service, or from the particular
who was impressed before the ship
terms of the contract between these parties.
returned to the port of delivery, might
But there is no such rule applicable to
recover wages pro tanto. Neither is there
marine service in general as will prevent
any thing in the terms of this contract to
the plaintiff's recovering, neither will it be
prevent the plaintiff's recovering on a
found, on consideration, that there is any
quantum meruit. The note is a security,
thing in the terms of this contract to defeat
and not an agreement; it is in the form of a
the present claim. It is indeed a general
promissory note, and was given by the
rule that freight is the mother of wages;
master of the ship to the intestate to secure
and therefore if the voyage be not
the payment of a gross sum of money, on
performed, and the owners receive no
condition that the intestate should be able
freight, the sailors lose their wages; though
to, and should actually, perform a given
that has some exceptions where the voyage
duty. The condition was inserted to
is lost by the fault of the owners, as if the
prevent the desertion of the intestate, and
ship be seized for a debt of the owners, or
to ensure his good conduct during the
on account of having contraband goods on
voyage. And in cases of this kind, the
board; in either of which cases the sailors
contract is to be construed liberally.
are entitled to their wages though the
voyage be not performed. Vin. Abr. In Edwards v Child, where the mariners
“Mariners,” 235. But here the rule itself had given bonds to the East India
does not apply, the voyage having been Company not to demand their wages
performed, and the owners having earned unless the ship returned to the port of
their freight. There is also another general London, it was held that as the ship had
rule, that if a sailor desert, he shall lose his sailed to India and had there delivered her
wages: but that is founded upon public outward bound cargo, the mariners were
entitled to their wages on the outward case to which the express contract does not
bound voyage, though the ship was taken apply.”
on her return to England. This note cannot
Arguments on behalf of the defendant.
be construed literally, for then the intestate
would not have been entitled to any thing “Nothing can be more clearly established
though he had lived and continued on than that where there is an express contract
board during the whole voyage, if he had between the parties, they cannot resort to
been disabled by sickness from performing an implied one. It is only because the
his duty. But even if this is to be parties have not expressed what their
considered as a contract between the agreement was that the law implies what
parties, and the words of it are to be they would have agreed to do had they
construed strictly, still the plaintiff is entered into a precise treaty: but when
entitled to recover on a quantum meruit, once they have expressed what their
because that contract does not apply to this agreement was, the law will not imply any
case. The note was given for a specific agreement at all. In this case the intestate
sum to be paid in a given event; but that and the defendant reduced their agreement
event has not happened, and the action is into writing, by the terms of which they
not brought on the note. The parties must now be bound: this is an entire and
provided for one particular case: but there indivisible contract; the defendant engaged
was no express contract for the case that to pay a certain sum of money, provided
has happened; and therefore the plaintiff the intestate continued to perform his duty
may resort to an undertaking which the during the whole voyage; that proviso is a
law implies, on a quantum meruit for work condition precedent to the intestate or his
and labour done by the intestate. For representative claiming the money from
though, as the condition in the note, which the defendant, and that condition not
was not complied with, the plaintiff cannot cannot now recover any thing. If the
recover the sum which was to have been parties had entered into no agreement and
paid if the condition had been performed the intestate had chosen to trust to the
by the intestate, there is no reason why the wages that he would have earned and
performed certain services for the meruit, he would only have been entitled
for the work and labour of the intestate in a stipulated that he should receive thirty
guineas if he continued to perform his duty contracting parties; and in which an
for the whole voyage. He preferred taking innocent person must suffer if the terms of
the chance of earning a large sum in the his contract require it; e.g. the tenant of a
event of his continuing on board during the house who covenants to pay rent and who
whole voyage to receiving a certain, but is bound to continue paying the rent,
smaller, rate of wages for the time he though the house be burned down.
should actually serve on board; and having
Lord Kenyon Ch.J
made that election, his representative must
be bound by it. But that must be taken with some
qualification; for where an action was
In the common case of service, if a servant
brought for rent after the house was burned
who is hired for a year die in the middle of
down, and the tenant applied to the Court
it, his executor may recover part of his
of Chancery for an injunction, Lord C.
wages in proportion to the time of service:
Northington said that if the tenant would
[3] but if the servant agreed to receive a
give up his lease, he should not be bound
larger sum than the ordinary rate of wages
to pay the rent.
on the express condition of his serving the
whole year, his executor would not be With regard to the case cited from 2 Lord
entitled to any part of such wages in the Raym.; the case of a mariner impressed is
event of the servant dying before the an excepted case, and the reason of that
expiration of the year. The title to marine decision was founded on principles of
the case are that the common rate of wages nothing to guide us but the terms of the
is four pounds per month, when the party contract itself. This is a written contract,
is paid in proportion to the time he serves: and it speaks for itself. And as it is entire,
and that this voyage is generally performed and as the defendant's promise depends on
no contract between these parties, all that the other party, the condition must be
the intestate could have recovered on a performed before the other party is
quantum meruit for the voyage would have entitled to receive any thing under it. It
been eight pounds; whereas here the has been argued however that the plaintiff
defendant contracted to pay thirty guineas may now recover on a quantum meruit:
provided the mate continued to do his duty but she has no right to desert the
as mate during the whole voyage, in which agreement; for wherever there is an
case the latter would have received nearly express contract the parties must be
guided by it; and one party cannot upon it. The laws of Oleron are extremely
relinquish or abide by it as it may suit his favourable to the seamen; so much so that
advantage. Here the intestate was by the if a sailor, who has agreed for a voyage,
terms of his contract to perform a given be taken ill and put on shore before the
duty before he could call upon the voyage is completed, he is nevertheless
defendant to pay him anything; it was a entitled to his whole wages after deducting
condition precedent, without performing what has been laid out for him. In the case
which the defendant is not liable. And that of Chandler v Greaves, where the jury
seems to me to conclude the question: the gave a verdict for the whole wages to the
intestate did not perform the contract on plaintiff who was put on shore on account
his part; he was not indeed to blame for of a broken leg, the Court refused to grant
not doing it; but still as this was a a new trial, though I do not know the
condition precedent, and as he did not precise grounds on which the Court
perform it, his representative is not proceeded. However in this case the
entitled to recover.” agreement is conclusive; the defendant
only engaged to pay the intestate on
Grose J concurred.
condition of his continuing to do his duty
“In this case the plaintiff must either on board during the whole voyage; and
recover on the particular stipulation the latter was to be entitled either to thirty
between the parties, or on some general guineas or to nothing, for such was the
known rule of law, the latter of which has contract between the parties. And when we
not been much relied on. I have looked recollect how large a price was to be
into the laws of Oleron; and I have seen a given in the event of the mate continuing
late case on this subject in the Court of on board during the whole voyage instead
Common Pleas, Chandler v Greaves. I of the small sum which is usually given per
have also inquired into the practice of the month, it may fairly be considered that the
merchants in the city, and have been parties themselves understood that if the
informed that these contracts are not whole duty were performed, the mate was
considered as divisible, and that the to receive the whole sum, and that he was
seaman must perform the voyage, not to receive anything unless he did
otherwise he is not entitled to his wages; continue on board during the whole
though I must add that the result of my voyage. That seems to me to be the
inquiries has not been perfectly situation in which the mate chose to put
satisfactory, and therefore I do not rely himself; and as the condition was not
complied with, his representative cannot though hired in a general way, is
now recover any thing. I believe however considered to be hired with reference to
that in point of fact these notes are in the general understanding upon the
common use, and perhaps it may be subject, that the servant shall be entitled to
prudent not to determine this case until we his wages for the time he serves though he
have inquired whether or not there has do not continue in the service during the
been any decision upon them.” whole year. So, if the plaintiff in this case
could have proved any usage that persons
Lawrence J concurred.
in the situation of this mate are entitled to
“If we are to determine this case wages in proportion to the time they
according to the terms of the instrument served, the plaintiff might have recovered
alone the plaintiff is not entitled to according to that usage. But if this is to
recover, because it is an entire contract. depend altogether on the terms of the
In Salk, there is a strong case to that contract itself, she cannot recover any
effect; there debt was brought upon a thing. As to the case of the impressed man,
writing, by which the defendant's testator perhaps it is an excepted case; and I
had appointed the plaintiff's testator to believe that in such cases the King's
receive his rents and promised to pay him officers usually put another person on
100l. per annum for his service; the board to supply the place of the impressed
plaintiff shewed that the defendant's man during the voyage, so that the service
testator died three quarters of a year after, is still performed for the benefit of the
during which time he served him, and he owner of the ship.”
demanded 75l. for three quarters; after
judgment for the plaintiff in the Common
Pleas, the defendant brought a writ of DOMINION OF INDIA
error, and it was argued that without a full
VS.
year's service nothing could be due, for
that it was in nature of a condition ALL INDIA REPORTER LIMITED
whether the party can recover special the respondent for the entire set as the fact
damages from the other party under this that the loss of the three volumes renders
respondent at Nagpur for being carried and and their loss renders the entire set useless.
consigned was addressed to the respondent compensate the respondent for the entire
PARKE B, ALDERSON B,
CASE COMMENTARY
PLATT B, MARTIN B
In this case, the application of section 73
FACTS
of the Indian Contract Act (1872) was in
question. The Hon’ble Court while The claimants, Mr Hadley and another,
deciding what amounts to loss arising in were millers and mealmen and worked
held that such loss would only include the the City Steam-Mills in Gloucester. They
loss which was contemplated in the cleaned grain, ground it into meal and
contract and of which both the parties were processed it into flour, sharps, and bran. A
aware and nothing beyond that. Special crankshaft of a steam engine at the mill
damages can be recovered only when the had broken and Hadley arranged to have a
special purpose of the contract is known to new one made by W. Joyce & Co. in
the other party. Otherwise, the loss Greenwich. Before the new crankshaft
incurred could only be confined to the could be made, W. Joyce & Co. required
Darling J. said:
TRUSTS, WILLS, PROBATE
The flat was let to the defendant for the
AGAINST PUBLIC POLICY
purpose of enabling her to receive the
visits of the man whose mistress she was
and to
EGERTON
commit fornication with him there. I do
V
not think that it makes any difference
whether the defendant is a common BROWNLOW
prostitute or whether she is merely the
[1853] 4 HLC 484
mistress of one man, if the house is let to
her for the purpose of committing the sin
of fornication there. BENCH
Public policy ‘has been confounded with principles to be clearly deduced from them
what may be called political policy; such by sound reason and just inference; not to
as whether it is politically wise to have a speculate upon what is best, in his opinion,
sinking fund or a paper circulation, or the for the advantage of the community. Some
degree and nature of interference with of these decisions may have no doubt been
foreign States; with all which, as applied to founded upon the prevailing and just
the present subject, it has nothing whatever opinions of the public good; for instance,
to do.’ For these reasons, in our view, the the illegality of covenants in restraint of
defendants’ point on public policy is marriage or trade. They have become part
the falsity of the written statement and the to the appellant-plaintiff as 'My darling' is
a strong circumstance to show that what and, therefore, he thought that it was
the appellant-plaintiff says is true. There is unbecoming of the cultured family of the
no cross-examination of the appellant respondent-defendant. However, nothing
regarding this letter. There is no attempt by whatsoever has been shown as to what was
the respondent to explain and deny this that bad character except that she had
letter in his examination-in-chief. submitted herself fully to him. If that was
the bad character, that equally applied to
At that time, there was no reason to give a
himself. She had submitted herself on the
false name unless the appellant-plaintiff
promise of marriage. However, it appears
and the respondent-defendant had been
that so far as the respondent-defendant is
living as a husband and wife and the
concerned, he had exploited her by the
appellant plaintiff was living under that
false promise of marriage. If there is
name. This circumstance very strongly
anything bad in either of them, it is in !the
corroborates the say of the appellant that
character of the respondent-defendant
there was the promise to marry and,
rather than that of the appellant-plaintiff. It
therefore, they were living as husband and
appears that this false excuse of bad
wife and describing themselves as such.
character of the appellant as against the
Even the independent witness like landlord
"cultured" family of the respondent has
and neighbour Ex. 34 who has seen the
been merely given to get away from the
two living together for three months in his
promise of marriage.
house has also stated that they were living
as husband and wife. In the cross- The learned counsel for the respondent
examination, the respondent has admitted Mrs. Chinubhai has strongly submitted
that he stayed with her as she insisted to that there was no promise to marry and it
stay in the hotel and they had stayed was a voluntary and free relationship
together for two days. He has also between the two; the respondent was
admitted that he stayed with her at Rajkot already married and the close intimacy
for about 5 to 6 days. Regarding the between a man and woman does not
photographs, the respondent had to say in necessarily mean promise of marriage. If
the cross-examination that they had gone there was merely word against word, such
to the photographer because of her argument may have some force. But
insistence. The averment in the written having regard to the circumstances
statement that the respondent became. mentioned above, the word of the
aware of the bad character of the appellant appellant-plaintiff seems to be more
probable, natural and acceptable as against certainly talked to some friend or relative.
the word of the respondent-defendant However, she has not examined anyone. It
which is less probable and absolutely is to be noted that she is a Brahmin girl
unacceptable. Mrs. Chinubhai submitted from Goa and the appellant-plaintiff and
that so far as so-called promise to marry is the respondent-defendant are in Rajkot.
concerned, there is no evidence except The respondent is already married and
bare word of the appellant-plaintiff who is Muslim, belonging to totally a different
highly interested in making false religion. In such circumstances, it would
allegations and it is clearly an attempt to be natural that she would not inform any of
extort money and her evidence cannot be the relatives or friends. It is not shown that
taken at its face value. If it was a matter of she had any friend or relative in Rajkot.
her word only, this contention would have Where they were living were the friends of
some merit. But her word is supported by the respondent and not of the appellant.
many circumstances. She has submitted Really speaking, this argument should
that the photographs do not prove any apply to the respondent who has examined
promise of marriage nor does the letter. no witness on his behalf. He has not
examined his own wife who had visited
The photographs and the letter merely
the place twice. He has not examined any
show that the two were having some
friend with whom they were living. In the
intimate relations and nothing more and
cross-examination of the appellant, it was
certainly no promise of marriage.
suggested to her by the respondent-
It is not possible to accept this contention defendant that she was not ready to marry
also because one has to look to the entire with the respondent before he takes
conduct for all the time. It is clear that divorce from his wife. She has denied this
there was not only a promise, but a suggestion. But this suggestion clearly
continuing understanding between the two implies that the respondent wanted to
that they would get married and only the marry the appellant-plaintiff without
timing of the marriage was to be agreed getting divorce from his first wife.
and fixed and ultimately when she insisted
In view of the above discussion, the
for the marriage, the respondent-defendant
finding of the lower Court that there was
went back on his promise and committed
no promise of marriage cannot be
breach of the promise. Mrs. Chinubhai has
sustained has to be reversed. The learned
also submitted that if really she had a
trial Judge has observed that :
promise of marriage, she would have
"considering the whole evidence and its promise, the respondent has committed
cumulative effect, I am of a view that breach thereof. Even otherwise, there is
parties were in love since long with each clear evidence to show that the respondent-
other and she surrendered (to) the defendant has not been willing to keep and
defendant for that reason only and not of fulfil his promise.
the so-called promise as stated by her."
The next question that arises is whether the
"no doubt they remained as husband and appellant-plaintiff is entitled to any
wife, but only for that reason, in the damages or compensation and if yes, how
instant case, it cannot be said that she much. On this question, we had requested
surrendered herself due to the promise." the learned Advocate Mr. M. D. Pandya to
render his assistance as amicus curiae and
"Their, love affairs ended into bodily
we have heard him also.
happiness. Mere residing as husband and
wife for some period cannot establish that The learned counsel for the respondent-
she only surrendered herself to the defendant has submitted that award of
defendant as she was promised by the compensation in such a case would be
defendant to marry her. Circumstance against the public policy and morality. If a
shows that they were in love since long but woman lives in illicit cohabitation with a
when they got opportunity to live together, man and thereafter comes out with a case
both have taken it. Before surrendering of damages, such claim would not be
herself, she could have insisted to perform countenanced by any Court of Law and
the marriage first. That she had not done. justice and, therefore, the Court should
Therefore, I am of a view that the facts refuse any compensation. She has relied on
regarding promise to marry her is the decision in the case of Gherulal Parakh
subsequently got up fact for the institution v. Mahadeodas Maiya, AIR 1959 SC 781
of this suit." wherein the Supreme Court has observed
as follows:-
Such conclusion of "no promise to marry"
cannot be sustained and is contrary to
evidence. Therefore, there is no escape
"The primary duty of a Court of Law is to
from the conclusion that the respondent-
enforce a promise which the parties have
defendant had promised to marry the
made and to uphold the sanctity of
plaintiff. On that finding, there is no
contracts which form the basis of society,
further dispute that if there is such
but in certain cases, the Court may relieve
them of their duty on a rule founded on Courts must, by every means in their
public policy; the doctrine of public policy power, promote matrimony, and the
is extended not only to harmful cases but incurring of lawful sexual relationship
also to harmful tendencies." alone and ought not to give sanction or
approval, even in an implied form, to
Relying on the aforesaid decision, the
irregular sexual relations outside the bond
learned counsel for the respondent has
of matrimony, even where they may
submitted that if the Court were to award
constitute no offence of infringement of
damages in the present case, it would be
the Penal law."
harmful and it would encourage harmful
tendencies and it would be against public None of these cases would be applicable in
policies. In support of this contention, the the present case. It is true that there was
learned Counsel for the respondent has cohabitation between the parties and it was
also relied upon a judgment in the case of illicit cohabitation without matrimony.
Istak Kamu Musalman v. Ranchod Zipru However, the damages are not claimed on
Bhate, AIR 1947 Bom 198 wherein it was the basis of illicit cohabitation or for any
held that if the consideration is immoral, immoral consideration. It is only a side
transaction is void. effect or a by-product and the cause of
action is not based on such cohabitation.
In the case of Manicka Gounder v.
Muniammal, AIR 1968 Mad 392 which is The case is based on the promise of
strongly relied upon by the respondent, it marriage and breach of such promise. If
is observed as under : - the appellant-plaintiff proves that case, a
clear actionable wrong is proved for which
"Where due consideration relates strictly to
claim for damages or compensation is
past cohabitation, which is illicit, in the
maintainable. Merely because the parties
sense that it is outside matrimony, but
had also illicit cohabitation would not
which otherwise does not constitute any
make the legal and valid cause of action
offence, it would be conceivably held, on
illegal and immoral. It is a well settle law
the circumstances, that the promise to pay
that breach of promise to marry is
is supported by good consideration. But
actionable and damages and compensation
even so, though this consideration is not
for such breach can be awarded.
forbidden by any law, nevertheless it falls
under the interdict that it may be 'immoral The case of Maung Sein Kyi v. Maung
or opposed to public policy'. For the Sein Kyi, AIR 1916 Lower Burma 45 is a
case of breach of promise of marriage and by way of compensation for suffered, and
damages in such case and it was held as not by way of punishment for wrong
follows : - inflicted. Hence the 'vindictive' or
"exemplary' damages of the law of tort
"Under S. 74 of the Contract Act, it is
have no place in the law of contract. To
open to the Court to award such
this rule, however, the action for breach of
compensation not exceeding the amount so
promise of marriage is an exception; in
named as appears to it to be reasonable.
that case injury to the feelings of the
The defendant urges that Rs. 2000/- is an
disappointed party may be taken into
excessive amount to award against a
account in the assessment of damages."
person in his position of a clerk on Rs.75 a
month. As he is insolvent it appears to me This is the well settled common law in
improbable that the plaintiff would realize England which applies in India also. Thus,
any considerable sum from the defendant the breach of promise of marriage is not
himself but as pointed out, his step father only actionable and there is no bar of
holds a well paid Government public policy operating against the same
appointment and the defendant's position but even exemplary damages apart from
does not alone justify a reduction of the the normal damages would be awarded.
damages. He has treated the plaintiff in a
shameful and hard-hearted manner and if,
as was stated in this Court and not denied, In the case of Jarvis v. Swans Tours Ltd.,
he has since married another girl, he has (1973) 1 QB 233, the Court of Appeal held
put it out of his power to make even tardy that the plaintiff is entitled to
amends to the plaintiff by offering her the compensation for his disappointment and
status of a chief wife. On the other hand, distress at the loss of the entertainment and
Rs. 2000/- is a handsome sum to a girl in facilities for enjoyment which he had been
the plaintiffs position and is, I consider, a promised in the defendant's brochure and
Rs. 60,000/-. Such amount would give a Court as amicus curiae at the request of the
reasonable maintenance per month for Court. His assistance was disinterested and
lifetime. That would also take care of all useful and was sought on the question
compensatory, aggravated or exemplary case like the present one and what would